Gee and Watson

Stockmarkets over the last 10 years have been relatively kind. However, some may argue that a good year's performance brings markets one year closer to a decline. The doomsayers are never far away and as we enjoy prolonged periods of good stockmarket growth their voices grow louder. If investors were to disinvest with each negative prophecy or prediction the outcome would be inevitable - missing out on much growth. If stockmarket declines are predicted often enough then eventually a prediction will prove accurate. Remember, even a broken clock is correct twice a day.

One thing is certain and that is the future is uncertain. Despite human advancement, there has not been an individual or an algorithm which has been able to predict the future, let alone the exact correct moment to sell a stock and, even more difficult, the exact time to re-enter a market. History suggests that often the best action is to take no action and to sit tight and allow situations to recover.

As we are unable to predict the future with any degree of accuracy, Gee & Watson investment portfolios have been designed to provide significant diversification in order to seek to limit any potential downside.

We don't have to go too far back to find good examples as to life's unpredictability. Who would have predicted Brexit five years ago? And who would have predicted the referendum results in June 2016 and the extreme twists and turns in the subsequent years? Let's also throw a certain Donald Trump into the mix and coronavirus (Covid-19) which has literally blown in from nowhere. If we were to react to all those events we would be in and out of the market more often than the hokey cokey and the damage to investment portfolios and strategies would be damaged and compromised.

Consequently, in a well-diversified portfolio the correct action is to do nothing. It is not the action of the complacent, but simply, more often than not, the correct action.

To amplify this stance, I include a compelling document produced by Quilter Investors which I trust you will find interesting, informative and perhaps reassuring. Of course, if you require any further information please do not hesitate to contact your Gee & Watson adviser.

Quilter Investors – Investing through volatile times

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