When you invest, be prepared to expect the unexpected.
From time to time, equity markets experience heightened event-related volatility. In such times, it can be helpful to keep in mind “Volatility is a normal part of long – term investment.”
Recently, the decision of the UK electorate to leave the European Union is unexpected, and has resulted in significant amount of economic and global market uncertainty with investors concerned about the increase in volatility and confusion over “what’s next.”
The Brexit decision is more political causing some macro – economic adjustment which has been influencing investors’ behavior towards financial markets. It is expected to be more modest in its effect than the financial crisis or the sovereign debt crisis we experienced in the past.
When it comes to long -term investments, keep a long term view and ignore the day to day noise of markets.In life, there are two things; controllable and uncontrollable. Instead of stressing yourself with uncontrollable, put all your energy and attention into what you can control – discipline, costs and taxes.
Before making any investment, you must know your risk appetite and risk capacity level. Basically you need to understand yourself as an investor, your current situation and what it takes to achieve your long term goals.
Different investments perform differently over time in different economic conditions. Hence, you must understand that risk and return are related, and only some risks are worth taking.
When investing in high risk assets such as shares you need to look at medium to long term investment time-frame. And more importantly you need to understand that during your investment time frame you might come across some form of investment risks such as market risk, liquidity risk, legal, regulatory and international investment risk, currency risk, credit risk and so on. Therefore, with your investment decisions it is important to understand what type of risks you are willing to expose yourself to, and what strategies you can apply to minimize them.
Be aware that in the long term volatility is inevitable. However, staying calm, having a well diversified investment portfolio, sticking to your plan and reviewing it with your financial adviser on a regular basis you would be in a better position to manage it.
We focus on having a process driven and disciplined approach which combined with academic research and practical experiences. Should you have any question or want to discuss on your financial matters contact Halle Yilmaz.
Note: This article is issued by Halle Yilmaz ( Australia) herein is solely for information purposes and shall not in any way constitute advice or an invitation to invest.This material does not take into account your investment objectives, particular needs or financial situation.Before acting on this material, you should consider talking to your financial adviser.
Halle Yilmaz is a financial adviser and business consultant. As a financial adviser, she gives solid advice that can create rapid and lasting results for her clients. Sign up for her free E-Book and download “7 Steps to Healthy Wealth Management.” Follow Halle on Twitter @halleyilmaz