Newsletter - 13th November 2020

Sometimes you just have to pay no attention and ignore everything going on around you!

When it comes to investing, I have found that there tend to be two approaches that people take. There are those who watch closely, checking valuations on a regular basis and taking note of every rise and fall in the value of their pensions, ISA's etc. Then there are those who totally ignore their plans, often for years at a time, only paying attention when plans mature or a statement lands on their doormat once a year.

Now, both approaches have their pros and cons. Paying close attention means that you can ensure your financial plans stay on track and you can react to changes in markets. It also means that you can stress over every drop in value and possibly make changes based on fear and negative emotion that can come back to haunt you in future.

Ignoring your money means you don't know about any investment losses as markets fall, so less stress and less negative emotions. However, it can also mean that you can let poor investments continue well past their sell-by date and therefore hurting your long term financial plans.

This week has shown that sometimes the world moves so fast that neither option is appropriate. 

Markets across the world were falling just seven days ago, as the US Presidential election seemed to close to call and Brexit in the UK appeared on the radar once more, just as most countries started to impose restrictions on their population due to a rise in COVID-19 cases.

A clear win for Biden (although not yet officially confirmed and subject to legal challenges) and the news that a vaccine for COVID seems to be found, changed all of that. 

So who would have come out better? The investor watching their money like a hawk, or the one who has forgotten what they have and who it is with?

That is a million-dollar question. 

However, what this year has shown, and what is worth considering, is that some investments and funds have not performed as well this year as others. There is always an argument for leaving funds invested for the long term, but there is also a rationale for knowing when a fund, or funds, are underperforming and a change is appropriate.

That is where taking financial advice, and then reviewing that advice regularly is sensible. A good adviser will, in my opinion, let you know when doing nothing is the best option, but also when changes need to be made through performance, charges or a change in your investment objective or your circumstances.

As we know from the last week, you never know how the world will change - nor when!

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