The last few weeks have been incredibly tumultuous for stock markets in the UK. According to Bloomberg, the UK market lost £300 billion in the first month of former prime minister Liz Truss’s brief tenure, as her and former chancellor Kwasi Kwarteng’s mini-Budget spooked investors across the economy.
You may well have seen the effects of these events in your portfolio, perhaps seeing investments you hold lose value in turn.
At times like these, it can be difficult to keep a steady hand on your invested money. In your case as a professional footballer, it can be disconcerting to see money that you’ve set aside for after your playing career take a dip in value, especially as you know this money will be important for maintaining your lifestyle once you stop earning money from playing.
Many commentators and experts have been impressing the importance of staying calm and remaining invested, even as you may be seeing many thousands of pounds knocked off the value of your holdings.
Of course, while they are ultimately right that markets will typically recover, it can still be a challenge to hold your nerve and not act rashly.
So, discover three simple tips that can help you to keep a cool head and remain calm even during periods of market volatility like this.
1. Remember that your investment is for the long term
During your playing career, you probably won’t need the money held within your investment portfolio. In all likelihood, these holdings are there to support you when you stop playing football professionally.
So, even though you may have seen certain investments fall in value during a period of severe volatility, the key is knowing that your investment is held for the long term.
Historically speaking, it is true that investments will typically outperform cash and other holdings over longer periods. Indeed, according to figures from Barclays Smart Investor, £10,000 invested in the FTSE 100 in January 2001 would have been worth £23,286 by the end of December 2021.
That represents returns of 133.1%, despite the financial crisis in 2008 and the Covid-19 pandemic in 2020 both causing fluctuations and losses in value throughout the 20-year period.
While no investment is entirely secure and you may get back less than you put in the market, investing over a longer time frame can help to smooth out these changes in value.
There are very few certainties with investments, but volatility is one of them – simply, markets are going to rise and fall over time, and so are your investments. Remembering this can ease your mind and potentially keep you from selling and “realising” a loss when you don’t need to.
You may even want to stop checking your portfolio every day during periods of market volatility. While markets are down, it can be anxiety-inducing to obsessively check how your investments are performing.
By not doing this and remembering that you’re investing for the long term, you may prevent yourself from making any knee-jerk decisions over your money.
2. Keep your goals at the front of your mind
When you start investing, it’s often sensible to set goals for what you’re trying to achieve with your money.
Having your future ambitions at the centre of your financial decisions can focus your mind, giving you a clear target of what you’re trying to achieve.
During periods of market volatility, it can be a helpful course of action to consider these goals carefully before you make changes to protect your wealth.
For example, before you go to realise a loss by selling investments that have fallen in value, ask yourself: why did you invest in the first place? Do you need access to the value now? Or was it part of a wider strategy to provide you with income in later life?
While your wealth is the method of achieving your goals, it’s the targets themselves that really matter. Keep these in mind when markets are volatile to help maintain your steady, measured approach to the way you invest your money.
3. Work with an expert
Arguably the very best thing you can do when markets are volatile is to work with a financial expert, such as with us at ProSport.
When you work with us, we will design an investment portfolio that’s tailored to you, your risk tolerance, and your goals for the future.
We’ll always start with your goals, and then suggest strategies and investments with your wealth that put those ambitions front and centre.
Crucially, we have a huge amount of knowledge and experience that we can draw on to navigate difficult markets. We’ll take the burden of making decisions in these tricky conditions off your shoulders entirely, allowing you to focus on your football and building your career.
Meanwhile, you can be confident that an expert has a handle on your money and is making decisions with your goals in mind during volatile periods of market turmoil, securing your wealth for your future.
Speak to us
Want to work with an expert who can help you manage your investments in difficult market conditions? Get in touch with us at ProSport.
Email email@example.com or call 01204 602909 to speak to us today.
The value of your investment 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.
This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.