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Investing In Uncertain Times

Posted by Paul Wilson

We certainly live in interesting & turbulent times.

You only need to look at the headlines each day to realise things change quickly and frequently and this can test the resolve of even the most steadfast investors.

I have had a number of investors express to me their current “paralysis” based on their feelings regarding current global events. Whether it’s potential pandemics, climate change, looming recession, political unrest or stock market volatility, it’s easy to understand why investors are struggling with uncertainty.

Ultimately, that uncertainty stems from not being able to predict the future – you can ease that uncertainty by first accepting the undeniable fact that – you can’t.

What you can do however is anchor your investing on the fundamentals that will guide you through turbulent times. Fundamentals provide us with a degree of certainty in uncertain times.

Here are my top tips for investing & staying on track in uncertain times:

1. Keep the noise in perspective

There will always be media hype that accompanies every global development. While you can’t isolate yourself from the hype and hysteria, you can aim to keep it in perspective.
Adopt the philosophy that “this too shall pass”.

2. Invest without emotion

Investing, at its core should always be made without emotion. It’s emotions like fear, and/or fear of missing out that can cloud your judgment and cause you to make poor decisions. Invest wisely and diversify to future proof your portfolio.

3. Know your limits

Not being in control of market drivers can test the resolve of many investors. It’s important to not bail out at the first sign of choppy waters. Understand your investment fundamentals and focus on your long term plan rather than the short term fluctuations – stay the course.

4. Invest with discipline

Discipline is vital to weathering uncertainty. Know your goals and your timeframe and stay on track. Any overreaction or retraction can be equally costly – there can be a significant cost to not investing. By not leveraging your money through investing, you run the risk of it declining in value as inflation eats away at your wealth. The cost of everything continues to rise, however with interest rates on savings being so low, your money won’t keep up and be able to buy you as much in the future. You’re essentially going backwards.

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