I came across this brilliant phase today; “If you are going to jump into the swimming pool, you need to make sure there is water in it first” and I thought it was perfect when considering investing in the stockmarket.
So markets are still volatile and as one economic worry lessens, another one takes it place, but is this the time to jump in?
Well for me it is not a straightforward question, as it depends on time-frames. If you are looking to invest for a fairly short period of time and are looking for that ‘golden moment’ then you need to be careful as I do not think that we have reached the end of the uncertainty. As long as countries in Europe continue to need economic restructuring and the UK has yet to get to grips with delivering strong growth, then I believe markets will still deliver some volatile moments.
If you are looking for a long-term investment, as most should, then you need to check that the water is there in the pool and also be prepared to accept the swings and roundabouts of markets and structure your investments accordingly.
Of course no one can predict exactly where markets will move to and when the swings will subside, but with the properly structured portfolio, it shouldn’t be about whether you should be in or out of markets, but shaping your holdings appropriately. And of course, these are just my views and should be treated accordingly.
It strikes me that the two questions are both equally essential, but should be treated quite separately to each other: do you have water in your swimming pool and do you want to jump?