Long term planning vs. short term fear.

We are fast approaching the end of the tax year, while at the same time we’re clearly going through troubling times as the world reacts to the Coronavirus. Global stock markets have fallen quickly and sharply in recent weeks, the likes of which some younger investors will not have seen before. Obviously nobody enjoys times like these, as everyone invests for growth.

While a lot of people will be put off investing at this time, there are some tax allowances/reliefs that will be lost if not used before 5th April. Thinking about the long term, making use of these allowances forms an important part of a full financial planning strategy.

When markets fall, this does represent a better buying in point. But while things could still go down more – history dictates they will recover in the longer term.

But I know that human nature makes committing to that strategy difficult to take on board. So one idea for any potential investors who are currently torn between wanting to plan for the future but who are also concerned about current world events is relatively simple.

Invest into your ISA or pension etc, get the money into the plan before the tax year end and make use of the allowances that are available before they are lost. But you could then sit in cash, at least in the short term, so your money is not then at risk. While this is not a long term strategy (as over time charges and inflation will erode the value), it means that your money is in the right environment for longer term planning to be more effective.

As always speak to a professional adviser to help you get this done in the best way, remain calm and try not to panic.