Somebody once said: "There is no bad weather. There is just inappropriate clothing."
Our investment philosophy majors on "appropriate clothing":
- If you have discharged all of your debts.
- If you have adequate cash in reserve to cover any likely future liabilities.
- If you are living within your income.
- Why not spread some of your surplus capital around?
- Broadly based investment through sound investment management houses can produce attractive regular returns through dividend distributions.
- And additional capital appreciation is also possible over the long term.
"Yes", investment values can fall as well as rise. "Yes", it will always be possible to get back less than you originally invested - if you liquidate when prices are down. However, if you are not in debt, if you have sufficient cash in reserve to cover any likely future liabilities, if you are living within your income, why would you sell your investments when investment prices are low? Surely you can afford to wait until investment prices recover?
Even on your death, your heirs are not obliged to liquidate your investment holdings. They can have the holdings re-registered in their names and sell at some future point, to suit them.
"Yes", dividends can fall as well as rise. "Yes", individual companies can stop dividends altogether. However, if you are in a broadly based fund holding eighty, ninety, a hundred different companies' shares – are they all going to stop paying dividends at the same time?
All of that said, if the thought of the stock-market sends shivers down your spine, if you are likely to lie awake at night worrying about what might - or might not - happen in investment markets, then investment is not for you. Leave your surplus on deposit with National Savings and do not complain about the return you get. At least it is safe – unless the Russians invade?
We do not advise on investment in individual company shares. We prefer the broader spread of risk in a collective investment fund. And we monitor our selections on a regular basis.
We select collective investment funds from recognised investment management houses that are authorised and regulated by the UK Financial Conduct Authority. We select collective investment funds with a proven track record and positive ratings from ratings agencies.
Investment markets ebb and flow. If you sell when prices are low, you may well get back less than you originally invested. If you think you may become a forced seller, do not invest.
If you are inherently uncomfortable with fluctuating values, do not invest.
If you have no confidence in the longer-term prospects for investment markets, do not invest.