2020 and beyond
2020 has been a year that 99% of the world’s population didn’t see coming. A small elite group of intellectuals did and then there were those who simply plan ahead for any eventuality. What did that mean in real terms?
It meant that we entered into uncharted waters where our modern-day global economy is concerned. There have been devastating losses across the board, bankruptcies, unemployment, financial stimulus, shrinking GDP’s and of course investment portfolios that have taken huge hits with many still down.
We can take a snapshot of indexes like the S&P 500, the FTSE, NASDAQ and see that unprecedented bounce backs have been realized, the recovery cycle to date of all previous crashes have been very different to what we have witnessed so far in 2020.
Does it mean that everything has returned to normal because the world’s major indexes are showing a positive trend? The simple answer to that is no, we are very far from normal. The true impact of Covid-19 hasn’t even begun to bed itself in and when speaking to professionals globally, many investors portfolios are still down, some irretrievable.
The risks involved with investing in the global financial markets should come as no surprise, there are endless stock and share options, funds and ETFs/CFDs to choose from. With such a diverse selection it is therefore only right to expect that loss is inevitable at some point. The level of loss we can never predict, nor the level of return when investing directly into to financial markets.
Active management requires a certain skill set and even the best of fund managers make losses from time to time. Active management requires a flexible and healthy attitude towards risk and investors must be prepared to navigate through the peaks and troughs. This can be unsettling especially with the way things are at the moment with travel restrictions, riots and protests globally and a global pandemic that has successfully changed the way we will live from now on.
The pressures of our modern era are inescapable however we can work to reduce some of these and how they affect our daily lives with the decisions we make today. One thing we can do is to reduce stress and pressure is to look at how our money has and is being invested and change the strategy to fit our current stage in life.
Certainly, with how the markets have performed as a whole this year we have been forced to consider changes that we might not have considered for another 5,10, or 20 years. Where it’s natural to seek security for ourselves and our family, attitudes toward risk can change overnight.
With that in mind having part of a portfolio invested into a product that isn’t affected by the pandemic and delivers a passive quarterly income could provide downside protection against the more volatile assets within a portfolio, income when a job is no longer available.
To learn more about providing your clients with a passive fixed income solution as mentioned above, contact us: email@example.com