Volatility and Long-term investors
Posted by Andrew_Smith on Friday 25th of March 2022.
As the conflict in Ukraine escalates and Russia continues its invasion of Ukraine major stock markets have fallen dramatically. But what does this mean for your investments?
Stories about stock market falls are guaranteed to make headlines like the financial crisis of 2008 and the stock market lows of March 2009. And for many they are still fresh memories but it’s worth noting that an investment then in global stocks would have grown more than twofold a decade down the line*.
That might be an extreme example with those kinds of returns never guaranteed, and those who try to second-guess markets or try to time when to invest their wealth often get it wrong. However, it does go some way to illustrate the benefits of investing over a long-term time horizon and riding through the peaks and troughs of market movements.
Investing for the long term
Volatility in markets has many varied causes, from political shifts and central bank actions through to modern media. The Omnis fund managers responsible for your investment are looking at specifics that determine the real value of stocks and shares, and overarching thematic trends, such as long-term changes in demographics or spending habits across the globe.
Short-term movements in stock markets, as sharp as they may be, are part and parcel of investing. If you are investing over a sensible timeframe, your investments correctly reflect your attitude to risk and you have a well-diversified portfolio, in most cases, you should have little to fear.
*Financial Express, MSCI World Index, 09/03/09 to 09/05/18
The value of investments and any income from them can fall as well as rise and you may not get back the original amount invested.