The newspaper columns have been filled with angst about stock market volatility in recent weeks. Following one of the worst annual starts to equity markets, with Chinese shares falling off a cliff, and concerns about the price of oil, and its potential economic impact, observers are starting to ask whether we are entering bear country.
The impact of the tumbling oil price is not to be underestimated – it is having a serious effect in Russia, and Nigeria, the largest economy in Africa, has asked for $3.5bn in emergency funding from financial institutions.
Naturally, UK investors may have taken fright over this, and uncertainty over the looming potential Brexit does not help.
But figures released this week show that investors are taking a grown-up approach to their investments and still piling in to the UK and global economy. Chelsea Financial Services, which published the statistics, said that investors were picking up bargains in the equity sector, just like any other shopper in the January sales.
But perhaps this is the result of good financial advice – all too often unwitting investors sell when their stock is low, and buy at the peak, choosing what they perceive to be the “safe” option, when in fact it is anything but.
Investing in the stock market does have something akin to the casino about it – albeit with certain control factors, such as limited knowledge about a company’s performance.
But as has been highlighted this week, operating in the dark can have substantial consequences. Despite advertisements placed in newspapers, many women were still unaware that their state pension age was changing, leaving Baroness Ros Altmann to insist that the Department for Work and Pensions made every effort to tell people that the SPA was changing.
In an age when we are bombarded with information, it is still no good being passive about one’s financial situation. Actively sifting the wheat from the chaff is still the answer for one’s long-term financial good.
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