Hello,

 

Volatility is most certainly the word of the month for market commentators as we experience a pull-back in broad equity returns whilst inflation appears to be far more stubborn than expected. US equities lie just short of correction territory, a fall of -10% or greater in performance. Justifiably so, investors do not enjoy these periods of market pull-back. In times of stress, however it is important to put some context around market developments and to avoid rash decision making.

 

In the last number of decades, an equity market correction of -10% has occurred approximately once a year, each year. Market volatility, and indeed pullbacks are normal for equities. Remembering this history and context can lead to more rational decisions and significantly reduce anxiety when they do occur. Patience is also necessary, but market sell-offs are typically shorter than you might expect. Staying disciplined in times of volatility and not altering your long-term investment plan is one of the golden rules of investing, whilst trying to time market movements can be detrimental to your long-term goals.

 

As active managers, Zurich have the ability to take advantage of opportunities over all parts of the economic cycle. Our belief is that people need experts to look after their money, so we take a ‘hands-on’, active approach to investment management.

 

As always, if you wish to discuss anything in this newsletter in further detail, please do get in touch.