WEATHERING THE 'FINANCIAL' STORM

WHAT ARE THE ISSUES?

• There will always be period of substantial rises and falls within the economy.  These market cycles usually occur every 7- 10 years.
• In normal conditions different assets move in different ways and are said to be 'non correlated'.
• This non correlation can be used to reduce the impact of these movements in the markets and reduce the risk on a portfolio however risk can never be eliminated completely.
• Market sentiment can be driven by both actual and perceived factors and emotional factors are playing a large part in the current climate where we can see quality companies with substantially undervalued shares.

WHAT CAN I DO?

• Ensure that you have the correct mix of assets within your portfolio for your chosen level of risk.  Diversifying your portfolio can limit the impact of market volatility.  An example of where this has affected a large number of investors is with banking shares where individuals had substantial exposure to these as they were viewed as solid and reliable and provided good dividend income.  This clearly has proved to be the reverse over the past 18 months.
• Ensure that your investments are regularly reviewed to confirm that these continue to meet your needs and objectives.  Reassess, rebalance and reposition.
• Ensure that you always retain the correct level of funds in low risk accessible investments to provide you with cash if required and avoid encashing investments when values are low.
• Remember it is time in the markets which provide capital growth however troughs in the economic cycle can be an opportunity to invest if a five year view can be taken.

Let Milne Craig help you weather the storm.

For further information or if you have any questions contact Morag Lewis at Milne Craig on 0141 887 7811 or at morag.lewis@milnecraig.co.uk.