This was not a news headline, nor will it be a headline we will ever see.
Yet this is exactly what happened on Tuesday this week. The FTSE100 had its biggest rise ever, and the Dow Jones in the US went up by more than 11%, the biggest daily gain since 1933.
Our news doesn’t report this. Good news doesn’t sell, sadly. Sensationalist, bad news is what we hear when billions are wiped off the value of our pensions. No big deal apparently when billions are added to our pensions.
Are we out of the woods? We don’t know – it seems unlikely, as the economies of the western world have shut shop for three weeks, minimum. We would be surprised if we don’t see further volatility in the days and weeks ahead, but who knows?
Tuesday’s rises demonstrate one thing very clearly, that is, when markets move, they often move very fast, and very unexpectedly. Trying to time it is very difficult; we would say it is impossible, without a lot of luck. It’s why we stress to all our clients that it’s time in the markets, not timing the markets that matters.
Many people have been asking, are markets at their lowest, have they bottomed out? Who can say? The truth is, no one knows with 100% certainty.
What is absolutely certain is that shares in the great companies of the world are available for purchase at a significant discount from six weeks ago. Also, it’s worth highlighting, with a high degree of confidence (although not certainty), that the price of shares in the great companies of the world will be higher in five years than they are now. That’s all that matters; all else is noise and distraction.
One last point, knowing how the news reports on capital markets does make me wonder how good or bad things really are when it comes to other world events. Perhaps, worthwhile, switching off the news!
As ever, please do get in contact if you need our help. Our great team will do its best to help us all get through this together.
Please note that past performance is not a guide to the future, the value of an investment and the income from it could go down as well as up. You may not get back what you invest.