Platforms & Pensions are doing well , talk in the pub turns to portfolios and people get drawn in by stories of success . Markets tend to attract the most money in the good times . The dotcom bubble was a classic example and there have been other instances in history ( Tulip Mania in the 17th century and crypto today ), where rookie investors can ’ t wait to part with their money . Then , when prices crash , investors seek to cut their losses and bail out , nursing a bruised bank balance or worse . New investors run the risk of falling into two traps :
Buying high and selling low Reducing investment risk , which also means reducing the potential for returns
The media plays an important role in exacerbating our psychological fears , always keen to report on the billions of pounds wiped off the stock market when it crashes , without covering the billions that get “ wiped on ” in the good times . This fear is never more acute when
Performance of index since Jan 2020
FTSE All Share ( 8.3 %)
10 % |
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5 % |
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0 % |
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-5 % |
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-10 % |
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-15 % |
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-20 % |
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-25 % |
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-30 % |
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-35 % |
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Jan20 |
Apr |
Jul |
Oct |
Jan21 |
Apr |
Jul |
Oct |
Jan22 |
Apr |
Source : FE Analytics
Issue 86 - July 2022 / 61 /