View From the Top
from Spicers CEO Gordon Noble-Campbell
A Healthy Dose of Optimism...
12 February 2009
While it’s easy to get caught up in the short-term news and events of the global financial situation, a long-term perspective and a healthy dose of optimism can be helpful during these times.
The next 10 days or 10 weeks (or even months) might be difficult to predict with a high degree of accuracy. However, taking a step back and looking out over the next 10 years, we can be certain markets will return to growth and investment portfolios will recover.
Having noted this, I’m also very much aware of the prevalence of investment clichés, for example, the conventional investment wisdom to “stay diversified” and to focus on “time in the market” rather than “timing the market”. Importantly, investors must not lose sight of the fundamental truths which lie beneath these familiar phrases. In fact, I can’t think of a time in recent memory when these nuggets of truth have not been more relevant and valuable.
At this time, I think that it’s also appropriate to test our conviction as to whether economic and investment fundamentals are still constant, or indeed if they have significantly changed. Over recent months, we’ve often heard that current economic and market conditions are comparable to that of the “Great Depression” of the 1930s. A comparison of this nature needs to be put into the appropriate context. While market movements may well be in the same order of magnitude, the causes are different, as is the ability of global economies and markets to respond.
In this regard, it’s clear that the scale of the co-ordinated actions by central governments in response to recent events is unprecedented. But by the same token, the world of 2008 was much different to that of last century. The free and instantaneous flow of global information and capital has inevitably made financial market response to news (or rumour) more frequent and acute. This should also mean that any consequent period of adjustment is swifter, sharper and more transparent.
Regardless of the current environment, in my view, the economic foundations upon which global financial markets are built will continue to fulfill their purpose. Businesses will continue to generate profits, consumers will continue to buy goods and services, and people like you and I will continue to seek advice concerning the sensible investment of our capital.
Recognising that many investors are looking for guidance about how best to invest for the future during these uncertain times, Spicers has produced a ‘Next Steps’ guide which provides a frank assessment about how your investments may have been affected by recent economic events and what you can do now to keep your financial goals on track. To obtain your complimentary copy of this informative guide, simply click here to download it today. It’s well worth reading!
If you have any questions around this article, please contact us at any time.
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