Wow, now there is the million-dollar question! As you may know, markets generally are battling with a number of pressures and have reacted in the main by recent falls – the American S&P 500 is over 20% short of its January peak for example. Whilst this is extremely worrying to our clients, there will always be good and bad reasons to consider when thinking about investing.
Is now a good time?
- The effects of covid seem now to be in the rear-view mirror, a successful vaccine rollout should allow a return to consumer confidence and spending.
- Industries that were hardest hit by Covid restrictions have largely reopened and are getting back to normal. Think hospitality and travel for example.
- Some sectors have huge growth potential and investment – for example defence, basic materials, technology and healthcare. Demographics show demand will continue to grow.
- Despite recent increases, UK interest rates are still historically very low and coupled with the typical household now having savings this could encourage people to spend or invest.
Is now a bad time?
- The Ukraine crisis could have far reaching effects and we have no idea when this could be over. This is also causing volatility to global energy markets.
- Some countries are still fearful of Covid making a resurgence and are reacting with lock-downs that then can have negative effects on supply chains generally.
- Rising inflation will cause worry and will affect peoples’ spending power generally.
- Central banks are starting to unwind pandemic support measures and try to get back to a “long-term normality”.
Basically, all this feeds into companies profits and reduces the amount that can be paid back to shareholders. If a companies profitability is likely to decrease, its share price will suffer and vice-versa. With any crash it is not always obvious what the exact cause was until many years later but any responsible expert will always advocate TIME IN the markets, rather than TIMING the markets!
Get in touch with your local experts to discuss your own situation or with any worries you may have.