{"id":1092,"date":"2019-09-06T16:30:55","date_gmt":"2019-09-06T15:30:55","guid":{"rendered":"https:\/\/arkenstonewealth.co.uk\/?p=1092"},"modified":"2023-06-19T15:17:19","modified_gmt":"2023-06-19T14:17:19","slug":"whens-the-perfect-time-to-invest","status":"publish","type":"post","link":"https:\/\/www.arkenstonewealth.co.uk\/blog\/whens-the-perfect-time-to-invest\/","title":{"rendered":"When’s the perfect time to invest?"},"content":{"rendered":"

Chemical elements aren\u2019t your typical starting point for a finance blog, but I happened across an article last week about lutetium<\/em> – an element whose unique properties help to track time with quantum precision.<\/p>\n

Whereas your standard analogue stopwatch splits a second by a single decimal place (i.e. 0.1.), an advanced optical clock using lutetium can break a second down to 15 (fifteen)<\/em> decimal places.<\/p>\n

Whilst there\u2019s no obvious need for such precise timing in day-to-day life, physicists hope these quantum clocks will help unlock the secrets of the mysterious dark matter<\/em><\/strong> (nope, me neither) that purportedly makes up 27% of the universe\u2019s mass.<\/p>\n

I got a bit lost at this point in the article, but assume it went on to say that time-travel will be made possible long before we leave the EU\u2026.<\/p>\n

MARKET TIMING<\/strong><\/p>\n

I better move this on before I\u2019m accused of peddling lutetium as the investment opportunity of a lifetime. It\u2019s the matter of timing – market timing<\/em> in particular – that really interests me, as it\u2019s a topic of regular discussion with clients (now more than ever).<\/p>\n

Referendums. Leadership contests. Trump. Snap elections. Trade wars. Prorogation. Etc.<\/p>\n

These events have been spoken of as major risks to markets and investors. With hindsight, many of these concerns were either overblown or short-lived. What’s more, we know that Brexit<\/strong> itself will eventually come to a head in some way and we’ll all carry on regardless.<\/p>\n

In the meantime, however, the uncertainty is causing investors to procrastinate and sit on their hands until they feel better about the state of the world (good luck with that strategy).<\/p>\n

So, what can you do to reconcile the need to plan with the doom and gloom-mongering we’re seeing right now?<\/em><\/p>\n

“OUR FAVOURITE HOLDING PERIOD IS FOREVER”<\/strong><\/p>\n

When choosing to buy shares in a company, Warren Buffet<\/strong> – the world\u2019s most famous investor and a very quotable man – goes in with the expectation that he\u2019ll never sell the holdings, such is his conviction about that company and the capital market system itself.<\/p>\n

Why can\u2019t the same mindset be applied to financial planning?<\/p>\n

At Arkenstone, we\u2019re typically approached by people who want to plan and invest for, say 5 to 10 years, commonly in readiness for the transition into retirement.<\/p>\n

Looking at your finances in the context of such a time period can help put current market risks into perspective but even that might not be convincing enough to unify the heart and the mind.<\/p>\n

Perspective is only really achieved when you can say \u201cI\u2019m investing for the rest of my life\u201d.<\/p>\n

It might sound absurd but, in my experience, it\u2019s perfectly realistic<\/strong> to say this.<\/p>\n

Investing doesn\u2019t simply stop when you reach life milestones like retirement. Your risk profile might change as you get older but people rarely cash in their pots and run for the hills. Retirement is just the point at which you gradually begin to convert your capital to income<\/strong>.<\/p>\n

In fact, staying invested in markets throughout retirement and beyond is critical in helping to avoid the prospect of you outliving your assets.<\/p>\n

IT’S (NOT) QUANTUM, BABY<\/strong><\/p>\n

You don\u2019t need lutetium-powered precision timing when it comes to deciding when to invest.<\/p>\n

No-one knows what will happen in markets in the next month, year or decade. What we do know is that the short-term market uncertainty will have little or no bearing on your 30\/40\/50-year financial plan.<\/p>\n

Still not convinced? Here\u2019s 5 practical tips to help calm your jitters and be more decisive:<\/p>\n

1. CASH<\/strong> – keep back a healthy amount of money in savings (perhaps 6 to 12 months\u2019 spending). This is your \u201csleep easy at night money\u201d that isn\u2019t in any way linked to stock market movements.<\/p>\n

2. UNDERSTAND THE IMPACT<\/strong> \u2013 before investing, your adviser should show you<\/strong> (typically using some nifty financial modelling software) how volatility might impact the longevity of your money. I can\u2019t stress how useful an exercise this is when it comes to decision-making.<\/p>\n

3. PHASING INVESTMENTS<\/strong> \u2013 if you\u2019re really worried about short-term volatility, feed your capital into your pension\/ISA\/investment in stages. For example, you could invest 25% of the investment sum every month over a period of 4 months (or any frequency you feel comfortable with). This way, you buy into markets at different prices and thereby dilute the impact of short-term market movements.<\/p>\n

4. THINK GLOBAL<\/strong> \u2013 the world is a big place full of investing opportunities, so it\u2019s probably sensible to ensure your investments and pensions are globally balanced and diversified.<\/p>\n

5. HEAD IN THE SAND<\/strong> \u2013 a wise person once said to me that the best way to reduce risk is not to check the value of your portfolio too often. It might sound glib or counter-intuitive, but sometimes ignorance can be bliss.<\/p>\n

When it comes to planning, doing something is always better than doing nothing.<\/p>\n

If you have financial decisions to make and you need help getting your thoughts in order, please feel free to get in touch. There\u2019s no time like the present.<\/p>\n

Thanks for reading<\/p>\n

Simon<\/strong><\/em><\/p>\n

 <\/p>\n

Investments carry risk. <\/em>The value of your investment (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. <\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Chemical elements aren\u2019t your typical starting point for a finance blog, but I happened across an article last week about lutetium – an element whose unique properties help to track time with quantum precision. Whereas your standard analogue stopwatch splits a second by a single decimal place (i.e. 0.1.), an advanced optical clock using lutetium … Continue reading “When’s the perfect time to invest?”<\/span><\/a><\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/www.arkenstonewealth.co.uk\/blog\/wp-json\/wp\/v2\/posts\/1092"}],"collection":[{"href":"https:\/\/www.arkenstonewealth.co.uk\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.arkenstonewealth.co.uk\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.arkenstonewealth.co.uk\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.arkenstonewealth.co.uk\/blog\/wp-json\/wp\/v2\/comments?post=1092"}],"version-history":[{"count":1,"href":"https:\/\/www.arkenstonewealth.co.uk\/blog\/wp-json\/wp\/v2\/posts\/1092\/revisions"}],"predecessor-version":[{"id":1604,"href":"https:\/\/www.arkenstonewealth.co.uk\/blog\/wp-json\/wp\/v2\/posts\/1092\/revisions\/1604"}],"wp:attachment":[{"href":"https:\/\/www.arkenstonewealth.co.uk\/blog\/wp-json\/wp\/v2\/media?parent=1092"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.arkenstonewealth.co.uk\/blog\/wp-json\/wp\/v2\/categories?post=1092"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.arkenstonewealth.co.uk\/blog\/wp-json\/wp\/v2\/tags?post=1092"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}