Uncertainty = Opportunity
The month of March was the worst for stock markets since the 2008 financial crisis. All global markets were deeply impacted with losses as high as 35%. But what if you could turn the clock back 10 years and take advantage of the bull market that has just come to an abrupt end?
We have selected the FTSE100 to illustrate the significance of the recent market sell off and as you can see the past 10 years performance has been wiped out. This is why just leaving your savings and pensions in funds or ETF’s is not wise. You or your advisor should be regularly securing your profits and increasing cash exposure when necessary. Clients of SuisseRock were advised to increase cash reserves in December and January. Whilst we did not know COVID-19 would be the catalyst for a market crash, we did believe equities were over valued and a sell off was imminent.
If you made an investment of 100,000 CHF in back in 2010 you would have been sitting on a profit of just shy 0f 40%. Your investment in January 2020 would have been valued at 139,040 if you had simply purchased a FTSE100 ETF. If your investment was actively managed your returns could have been much greater. However, a 3.9% annual return in this current low interest environment is not too bad is it?
What can you do?
With the markets at their current levels, we believe this is an opportunistic time to start thinking about investing your savings and adding to them as and when you can. Whether this be via a pension or tax efficient investment account, having a managed equity exposure can help you maximise your returns and benefit from this crisis.
If you do not have a lump sum to invest you can start to accumulate wealth by contributing a managed amount each and every month. This contribution can be invested in to a portfolio of equities and managed either by yourself, your advisor or SuisseRock if you require some guidance. This is one of the most effective ways of investing as investing each month enables you to reduce your risk/exposure and take advantage of both unit cost averaging and compound interest.
You can find out more about saving regularly via viewing our previous article by clicking HERE.
Lump Sum Portfolio Management
If you have been accumulating wealth already and as a result have a significant amount of capital in cash with your bank, you may wish to take advantage of the recent sell off by investing your capital in to a diverse portfolio. Our clients benefit from low cost ETF strategies and investments with significant downside protection.