It was very early in the morning in the midst of the 2008 financial crisis, and I was sat in the studios of CNN in the West End of London.
The journalist interviewing me had asked me on camera, broadcast live to Asia, what I thought about the massive stock market falls off the back of the credit crunch.
My response, reinforced by the ticker tape type message displayed across the bottom of the screen was: “One day this will all be a blip on a chart.”
Time heals all wounds,and none more so than those inflicted by the stock marketAt the time, I did reflect that everyone might not well receive such a statement.
But a decade, and more, later when I look at the chart on our meeting room wall, the credit crunch impact on the market does indeed look like a “blip”.
Time heals all wounds, I guess, and none more so than those inflicted by the stock market.
If you cannot cope with volatility then frankly do not invest in shares, or funds made up of shares because what we are going through today is not unusual, it just has different roots.
I tend to get annoyed when I hear the media announce that “investors are selling out of a market because they are fearful”.
I think it is more accurate to say that it is market makers and advisers who are selling out of a market, investors in my experience tend to be more resilient
I do not guess we have received more than a handful of calls from clients during the current crisis.
They understand what is in their portfolios, and they have goals and objectives for that money married up to their financial plan.
When you are as old as me, you will realise that what we are experiencing is normal (not the cause this time so much as the outcome).
Black Monday of 1987 is probably remembered more for the storm and all the trees that fell than the fall in the value of shares
Following the Dotcom Bubble Burst of the early 2000s, analysts focused on aspects of individual businesses and seemed to ignore one of the fundamentals of the business world: cashflow.
Lack of cash will exterminate a company much quicker than lack of profits
The 1998 Asian crash saw many companies collapse, and millions of people fell below the poverty line.
Coronavirus is a horrible disease, and we may lose very many people ahead of their time as a result.
The impact on worldwide economies is and will continue to be very harmful, but we will come out at the other end and perhaps we may learn some lessons from it.
For our clients today the message is clear: do not be panicked by this, certainly do not sell, buy again and repeat until all the money is gone.
Understand what is in your portfolios and why it is there.
Also, sign off from social media, turn off the money programmes on TV and radio and ignore the pundits who claim to know when this particular crisis will come to an end.
Nick Bamford is executive director at Informed Choice
