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Avoiding Knee-Jerk Reactions to Negative Financial Events

19/05/2021 Posted by Comms | Comments(0)

Covid-19 has caused significant economic disruption and has heightened market volatility. Increased uncertainty and a volatile environment has naturally caused some investors to revisit their investment fund options.

Markets rise and fall daily. This is part of the natural cycle of investing, but historically, each significant market downturn has been followed by an eventual upswing. The timing of markets involves trying to anticipate when these highs and lows will occur. Unfortunately, it’s very hard to predict when to buy back in and getting it wrong means you could end up locking in losses and missing out on future gains.

Below is a graph of the performance of the MSCI Developed Global Equity Index (Unhedged) over a 4 year period.

The Covid-19 Pandemic Equity Market Crash began on 20th February to 7th April 2020, it was a major and sudden global stock market event which declined 34% during this period, the fastest-ever fall from record levels into a Bear market. Astonishingly, the losses from this record-breaking crash were fully recovered by 23rd August 2020, only five months after the market bottomed. The crash was unusually severe in a historical context, and this recovery has been equally, if not more, extraordinary. Since then it has sailed even higher, most recently on the back of positive vaccine news.

A typical member’s pension fund is considered a long-term investment. Investment markets are very difficult to predict, as a result, changing long term investment choices in response to short-term market events is generally not advisable.

The CERS Multi Asset Fund is a highly diversified balanced fund, in addition to its diversification benefits we offer members 2 different lifestyle strategies. The Standard and ARF Lifestyle options are designed to gradually reduce your risk exposure automatically as you approach retirement age.

For further information regarding the CERS suite of funds and lifestyle options please visit our website or contact our team via email (info@cers.ie).


Note: This article provides a summary and is for information purposes only. It does not constitute advice or a recommendation and it does not take into account your knowledge, experience, investment objectives or financial situation. 

The Trustee recommends that members should consider taking financial advice when reviewing their investment choice. The CERS Trustee preferred financial adviser is Milestone Advisory DAC. You can contact them or your own financial adviser to assist you to review your investment choices. You can contact Milestone Advisory DAC at info@milestoneadvisory.ie or call them on 01 4068020.

Milestone Advisory DAC t/a Milestone Advisory is regulated by the Central Bank of Ireland.

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