Investing in Uncertain Markets
May 31, 2022

Looking at the markets this morning – the last day of May 22, we actually see little shoots “maybe” coming through the gloom, and only time itself will tell us if they are shoots or not.    Values today are almost the same level as they were at the beginning of May – and that is something, because all they seem to have done this month is go down down and further down.      

For all business that we have had lately, this is currently sitting in cash waiting on a tell tale sign that things could improve before we invest it, as previously all values seemed to do was go down and nothing else.    Now what happens in the markets is that any growth that you earn will only appear on something like 7 or 8 days in the year, and that will be the growth for the whole of the year, so you need to be ready to capitalise on this i.e. be invested.   The other 250 odd days, the market rises and falls and by and large wipes itself clean so you will make very little or lose very little, and these days don’t count at all.  It is only the 7 or 8 days when it goes up big time.      

If we get 1 more day when the values rise, then we will start looking at investing some money, but don’t ever think that once you are on the upward projection that that is you made – far from it.  What invariably happens is that when you get an uplift in values, some investors will cash in when the going is good, whilst others will cash in and cut their losses, and so what this does is to reduce prices and then valuations.   In reality, things tend to level out for a period before they make any further movement and yes this can be down as well as up – you don’t know.    This is where you need to do your homework regularly to see what funds are improving over time and warrant your investment.   

The fact that you have money available on an investment platform ready to invest is great, because this lets you react quickly to improving markets otherwise you could easily lose out.  If you had money sitting in your bank account and wanted to invest this – it could take 2 – 3 days to get it onto the platform ready for investment, and so you would find that impossible to capitalise on the increasing markets.  

Remember the old adage of buy cheap and sell dear – and this is what you need to do if you are to get good growth.     To get this you need to do your homework A LOT, and then be ready to pounce once you have the facts showing that it is good to invest.   This is what M A P does for its clients regularly.     

Whatever way you adopt, you need to keep watching and monitoring things until they start picking up and then you will see the actual areas that improve most.    There are no easy answers and you need to work at it, after all if it was that easy – then everyone would do it.   

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