You may be feeling worried, anxious, stressed or even angry. This is going to cloud your decision making. The elephant in the room is that through no fault of your own, you’re in a less secure position than a couple of months ago and your previous investment decisions are coming back to haunt you.

Coronavirus is heightening everyone’s emotions. Emotions mixing with investment is dangerous!

You have to let go of the past. Learn from it, but don’t carry that baggage with you. It is what it is, you have to start from where you are now.

If you invested £10,000 in December 1973, by 1974 it would have been worth £3,000. People were literally suicidal. By 1977, you would have got your £10,000 back. By 2020 you would be sitting on over £200,000. This is typical of a financial crisis and you should expect the same this time around. Take a long term view.

“The stock market is designed to transfer money from the active to the patient”

Warren Buffett

If you have cash and 6-12 months living expenses, arguably now is the time to invest more. You’re getting a discounted rate, and over a long enough time horizon, the market will recover.

I read 3 great articles this week. If you read them, I guarantee you’ll feel better about your situation and be in the mindset to capitalise from this financial crisis.

1) 7 Boglehead Principles

Jack Bogle is the founder of Vanguard, and a champion of low-cost simple investing philosophies.  Touted as the best investor of all time, jack has 7 guiding principles. Super simple 5 minute read.

“The Bogleheads have a fantastic philosophy for the average investor. Buy and hold for the long term, focus on low cost index investing, and keeping it simple.”

2) The worst investor of all time turned out to do alright

In this blog post, we look at Bob who invested only at the peaks of the markets, days before each crash. A true lesson that it’s not about timing the market, it’s about time in the market.

“Long-term thinking has been rewarded in the past and unless you think the world or innovation is coming to an end it should be rewarded in the future”

3) Buying during a crisis

This blog post takes a deep dive into why it’s a good thing to buy during a crisis. A financial crisis is an opportunity.

“The simple math shows that, if we assume that the market will recover within the next few years, future returns are looking quite attractive right now”

About the author

Scott Nelson

Scott Nelson is a financial services expert, with over 10 years’ experience in the industry, including 6 years in FCA regulated companies. Read more
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