Why you shouldn’t let the markets dictate your plans (provided you have a financial plan)

Having had a turbulent few years due to the global pandemic, life has thankfully returned to a relatively normal state whereby we are no longer restricted by what we are able to do (within the law obviously).

However whilst that is the case within your normal lives, over the past year financial markets have continued to be volatile.

This has led to us having conversations with a few clients who have been thinking about changing plans because of what has been happening in financial markets in the short term.

Our approach has always been consistent to be open to discussing this, but reminding those individuals that is important not to let one thing (albeit an important one for future spending) over a short period of time impact all of their decision making in both the short and long term. Volatility is a feature rather than a bug when it comes to investing in the long term.

To use an analogy, you wouldn’t abandon your garden altogether because it has rained for a day or two, because it is totally normal!

For those in the building phase of their wealth, volatile times are potentially a time of opportunity – whether that be to seen as an advantageous time to invest additional surplus monies, start a side hustle/new business (did you know that Microsoft, Apple, Walt Disney, Airbnb and Uber were all started in times of economic uncertainty?!), or ask for that significant promotion/payrise.

For those in the phase of drawing down their wealth, provided that you are not personally advised by your financial planner (me) to ‘rein it in’ you should continue to live your life and not have your plans impacted.

Remember that for those in both phases of life that we stress test in a number of ways to ensure that viability of your financial plans on a regular basis (at least annually). This really reinforces the need and benefit for financial planning, as without it then maybe there wouldn’t be the understanding of the situation and the impact those decisions may have.


Please note: Investments carry risks. 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. Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.