When the Going Gets Tough, the Tough Get Going.

“$2.5 trillion wipeout”

“Share Market set to dive”

“Absolute bloodbath…”

These are just some of the absolutely frightening news headlines that have been pumped day-in day-out for the last month, and as much as we do tell our clients to ignore the headlines, we know this is challenging to do.

It's natural to feel anxious when faced with such headlines. Especially when you are seeing it firsthand with a meaningful proportion of your portfolio disappearing, after much saving, investing and waiting.

It leaves you wondering “should I sell now”, “will it come back”, “will I have enough”, and perhaps the most worrying, “will it get worse”.

A key part of our job as financial advisers is trying to identify and resolve the highly emotional and sometime impulsive decisions that comes as being human. We wouldn’t be helping anyone by making them believe that scary things can’t or won’t happen. Instead, to truly help our clients, we can, and we MUST assure them:

a)        that scary things always happens, markets rise and fall;

b)       it’s okay to be scared, it’s just not okay to act on that fear;

c)        to have confidence in the future, because history tells us so.

Perhaps, we’ve been here before. Well, not exactly here, but essentially the same place; the wars, terrorist attacks, recessions, pandemics, market panics and many more that we have since forgotten.

And despite all these events, the share market has created enormous compound wealth for those who invested, and remained invested, over decades.

None of those events were enough to stop progress, to stop improvement, to stop long-term success.

A while ago we wrote a blog about a certain health crisis that saw global equity markets react with a 20-30% fall in prices… At the time of writing that blog, the ASX All Ordinaries was trading at 5,241 points. 5 years later, the same index is now trading at 8,234 points, at the time of writing. That’s a 57% increase or a 9.23% p.a. return, even after the “absolute bloodbath” the media has recently told us about. And this doesn’t include the dividends paid along the way.

We need to remember that the stock markets have historically always risen far more than they have fallen.

For that reason, our clients invest.

For that reason, our clients remain invested.

For that reason, our clients continue to buy more shares.