We’ve all been there. You check your investments, see they’ve nose dived and have an instinctive panic. But regular investors can actually benefit from these market falls. Here, we explain how:
The rocky market over the past couple of years has revealed just how important it is not to let short-term shocks put us off our long-term investment plans. They also showed the enormous value of regular investments.
After The Market Falls…
Did you know that your money goes further after a fall? We have seen it time and time again and you stand to gain more when markets rise again.
That said, market falls are never comfortable to live through and there’s always a temptation to sell up and head for the hills. But periods of volatility are part and parcel of investing and even when we get particularly sharp short-term falls, we shouldn’t let this put us off our long term aims.
Periods Of Volatility
If you’re investing for the long term, you’ll always face short term volatility. But if you have a balanced portfolio, you’ll have time to ride out these ups and downs and take advantage of the potential growth in the markets.
During times of volatility, regular investments come into their own. By investing sums each month into a pension, stock market ISA or other investments, you take advantage of falls as well as rises, through pound-cost averaging. When markets are down, you’ll get more for your money, providing the potential for greater profits when they rise in value.
Lessons From The Pandemic
Anyone who lived through the market collapse at the start of the pandemic was likely to have been worried at the time about how far and fast the markets fell. But they’ll also know that falls don’t last forever. By the start of the first lockdown, stocks were already on their way up.
If you’re interested in finding out more about investing, then check out these articles:
However, please remember, there is a risk associated with investing. It’s important to seek independent advice before tying your cash up.