Should you cash in your investments and put it in the bank?

What a bumpy ride we’ve had for the past 2 weeks.

Our investments are worth less, there’s a mean virus out there and now we face the prospect of not working and, for many of us, not earning for 3 weeks.

I’ve had several of my clients contact me with advice on what to do.  It is natural to want to withdraw everything and put it into the safety of a bank.

But is it the right thing to do?

In my last blog post, I showed an example that you would lose almost half your potential returns if you were not invested for the 10 best days of growth over a 22 YEAR period.

I can’t tell you when the next big days of growth will be – however, I can say that there is a very good chance of one or two of them will happen over the next couple of months.  It does make sense to be invested in the market if you have a longer investment horizon.

The head of research at Glacier did an analysis of what would have happened  if, after the last couple of major stock market collapses, you

• left your investment as is.
• moved into the money market.
• moved into a 100% equity investment.

In each instance, moving into the money market gave the worst returns while the 100% equity one gave by far the best result.  I am not advocating that you blindly move all your investments into equity as there are other factors that must be considered.  However, this does illustrate that often the time to invest is after a major collapse.

Keep safe over the next 3 weeks.   If you need to chat, I am available on the phone, WhatsApp and FaceTime.