Dear << Test First Name >>
That Wuhan Thing
{We all get way too many emails. This is one of the reasons I don't bombard you with them. However, we live in interesting and unsettling times presently, and I hope you forgive this unsolicited entry to your "Inbox"!}
Try as I might, I find it impossible to block out That Wuhan Thing. 24/7 news media - incandescent with rage after the UK left the EU on 31st January with no resulting thermodynamic nuclear reaction; apoplectic that Trump's US economy goes from strength to strength - now has something to get its teeth into. Or rather, it has something to get your eyeballs and clicks onto, and that's all that really counts these days: news isn't so much reported on as created, to fill the schedule and get the ad revenues coming in.
And markets have done what they always do at such times: developed a severe case of the willies (a technical term used by those of us versed in the Dark Arts of Low Finance). Remember: world stock markets are super-irrational in the short-term and ultra-rational in the long. This is of course cold comfort when living in the moment. But it is fact. And given that my commitment to you is to only ever tell the truth about money as I understand it, facts are the currency of my communication.
Eleven Years Ago Today
Somewhat deliciously, 9th March 2009 was the low point of the last Catastrophe of Catastrophes: The Great Recession / Credit Crunch. When it seemed entirely possible that if I unplugged every TV and radio in the house, there was still a good chance I would see Robert Peston outside my house delivering the mail and telling me "this time it's different."
Of course, the Credit Crunch wasn't the end of the world. Since March 2009 the Great Companies of The UK have been on a rip, almost doubling in value. Over the water, the Great Companies of The USA have seen a four-fold increase in value over the last eleven years. Joyous returns for those who had the fortitude to remain invested when all about them were selling out. Data: FTSE AllShare, S&P500, includes reinvested dividends.
Fear Is Understandable, Acting On It Is Not
Who would not be unsettled presently? It's OK to be unsettled. I'm unsettled. Regardless, am I changing my long-term investment portfolio based on recent events? No. Should you? No.
Your investment portfolio is a direct function of your financial plan. And if your plan doesn't change, your portfolio doesn't change. We (I / you) cannot predict which way markets are going to go. So we don't try.
But that is not to deny your fear. And I want you to know that I can understand your fear. But I won't in good conscience let you act on that fear.
The declines are temporary, the advance is permanent. The long-term returns that equities offer come at a price: intense short-term volatility that can induce fear. Please feel free to embrace that emotion but please do not react to it!
In Closing, I'm Here
I'm not ignoring what is going on presently. Like you, I'm all too aware of it. Like you, I'm finding it hard to avoid That Wuhan Thing. But I'm not acting on it. And my counsel to you is to do likewise.
So please, if you want to, get in touch. You have my mobile phone number and email and inside leg measurement. I'm here to listen. But please don't expect me to tell you when the current Catastrophe of Catastrophes will pass. Because I don't know. For that matter, neither does anyone else. But I do know that it will pass - and that's all that matters.
Thank you for your time. And remember:
None of this is specific personal financial advice. Should you act on the contents of this email without first reading your own body weight in Key Features documents, personal illustrations and fund factsheets, you may well be struck down by lightning.
Nick Lincoln
Director
