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Pandemic-Proofing Your Investments

Should Investors Be Worried About the Pandemic’s Effect on Their Savings and Investments?

Today’s news about the effect oil giant Royal Dutch Shell’s losses could have on investments is clearly a concern for investors but volatility in the stock markets is nothing new.

The coronavirus pandemic is likely to continue to upset the markets, but this doesn’t mean long-term investors should be panicked by the regular ebb and flow. 

Markets have a general upwards trajectory in the long term, even though it’s not unusual for them to fall over a short time. 

The FTSE 100 has historically and regularly seen falls of 10% – though anything above a 20% fall is unusual.

Salman Haqqi, personal finance expert at money.co.uk, said: “It is really important that people who invest or have investments don’t panic unnecessarily in the face of turbulence in the market. 

“Investors should really be thinking ahead five years or more, rather than being startled by changes over weeks or months. 

“Pension schemes have caused concerns for some as they invest in the stock market meaning big rises and falls will impact how much is in personal pension pots.

“But, it is important to remember that pension savings, such as any investments, are also usually a long-term gain. Younger pensions investors in particular shouldn’t be overly concerned as there’s lots of time for the markets to recover before they are due to take their pension. 

“Older pensions investors who might be close to retirement, might be more concerned. But their pensions will also be invested in lower risk places, like bonds for example, which are safer and come with the benefit of a fixed rate return. Also, the older investors are, the more pension scheme bosses are likely to choose to invest their money in safer assets to limit the risk.”

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