Michael Roberts FPFS
Perspective on markets
Updated: Nov 17, 2020
We have recently experienced extremely volatile conditions in investment markets. Of course the media love nothing more than a crisis, but at times like this it is important to take a step back and look at things in perspective.
Whilst investment portfolios will undoubtedly have taken a hit in recent weeks, it is important to keep in mind that such periods are a natural part of normally functioning markets.
It is natural to ask questions like "when will the markets reach the bottom" and "how long will it take to recover". Of course, such questions are impossible to answer and, although many opinions will be forthcoming, the truth is we don't know for sure.
However it can be helpful to look at what has happened during times of trouble in the past. The chart below looks at various periods of bull (rising) and bear (falling) markets in the past, going back to 1900. Of course this is no crystal ball, but it certainly provides comfort that no matter how dire the bad times have been, markets have always bounced back. There's no reason of which I am aware, to believe this time will be any different.
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