Many people are watching their pension and investment portfolios with growing concern, following a rocky start to 2022. Volatile markets have made their values change drastically, with unpredictability a major element in rising fears. However, there is no need to panic, as Reeves Independent outlines here in this article.
Pensions are comprised of individual investments, which can be affected by several factors, such as the general economic climate, how individual companies are performing, and geopolitics. Some examples of the headwinds that the market is currently facing are potential interest rate increases, tension between Russia and Ukraine, and a cost-of-living crisis.
In the UK, Brexit has disrupted supply chains due to issues with freedom of movement and goods. Tensions between Russia and Ukraine has created worldwide unease, with several countries threatening sanctions against Russia, and Russia themselves threatening to retaliate. Some countries are still under COVID restrictions, stifling their economic growth.
When the global pandemic first struck in March 2020, our portfolios were subject to a harsh drop that affected the rest of the market. However, we navigated the difficult environment well by increasing exposure to the equity rally, and our portfolios recovered fully by Summer 2020.
In the face of one of the worst international emergencies in history, we still found a way to pull through. This demonstrates the ability of our portfolios to be resilient in the face of periods of uncertainty, and that we can continue to provide growth to our clients over the long term.
Retirement is a journey and there will always be ups and downs, but there is no need to make knee-jerk decisions. Acting on short term trends may cause you to lose out on long term growth. As such, we believe it is important to see the bigger picture and make smart, informed decisions. We will be by your side to ensure you make the best choices so that your portfolios can continue to perform strongly.
How to React
In the face of turbulent political and economic circumstances, market volatility is often a temporary response to this uncertainty. However, it is never a good idea to make quickfire decisions, as they may not be in your best interests.
We strongly encourage you to consider the long-term implications of such decisions before reacting to short term losses.
If you do have any concerns, we are always on hand to help. Please do get in touch with Reeves Investment Services.
Pensions are a long term commitment, you may not be able to access your pension funds until the age of 55 (currently), investments can go down as well as up and you might not get back your initial capital. Pension and tax legislation does and can change in the future which could impact your pension. This article is for information only and does not constitute advice or a recommendation to take action. Please note that investments can go down as well as up and you may not get back the initial capital invested.
Past performance is not a reliable indicator of future results. We always recommend you talk to a qualified financial adviser before making any investment decisions. The information in this article is the opinion of Reeves Independent Limited only and should not be seen as advice or a recommendation to act. Please seek independent financial advice before taking any action in respect of your pensions or investments.