Let’s face it, 2020 hasn’t really gone to plan, has it? From enduring a global pandemic, to juggling our days around remote working (and home schooling for many!), our lives and our finances have been turned upside down.
If you have an investment or investment portfolio, I can totally understand why you may have avoided looking at any recent paperwork relating to its performance! Values have been stripped since February this year and some investments are still suffering now, so that paperwork probably won’t make positive reading.
As such, it might surprise you to know that you may be able to benefit from investing, even during these challenging times. Yes, you read that right. There is money to be potentially made in bad markets as well, and here at Jones & Co, that’s exactly what we aim to deliver for each of our investment clients.
How do we do this? As financial advisors, we start by analysing your situation so that we can implement a clear strategy for you. That strategy will include certain tactics, not just diversification, and appropriate recommendations to invest in a variety of investment funds. Investment funds are, in turn, controlled by fund managers – the people who implement a fund’s investing strategy and manage its portfolio trading activities – who deploy both straightforward and complex investment strategies in relation to various market conditions.
The desired outcome for both a financial advisor and a fund manager is, of course, the delivery of positive investment returns irrespective of whether the markets are falling or rising.
There are lots of different methods used within specific investment strategies. Hedging is one method that is commonly employed. Hedging against investment risk means strategically using financial instruments or market strategies to offset the risk of any adverse price movements. Put another way, investors hedge one investment by making a trade in another.
Short selling is another method and occurs when an investor borrows a security and sells it on the open market with the view to buying it back later for less money. Short sellers bet on, and profit from, a drop in a security's price. Short selling has a high risk/reward ratio: it can offer profits, but losses can mount quickly and infinitely.
By utilising a variety of tactics, in essence, your investment seeks positive returns for your investment portfolio through bad markets not just good ones – we don’t stop when the world turns upside down. That’s why now is a good time to review your existing investment or give serious consideration to a new investment, even in what some might consider a volatile or uncertain market.
If you’re feeling overwhelmed or confused about where to turn with your finances, please get in touch. Our team of independent financial advice experts can take a look at your investment paperwork you’ve stashed in a drawer and help you make sense of your finances. So, call or email us to arrange your free, no obligation consultation and start benefiting from your investments immediately.
Mark Jones Dip PFS MCISI, is managing director of Jones & Co
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Risk warnings: Investments go up or down in value and on encashment you could potentially get back less than originally invested. The contents of this article are for information only and do not constitute financial advice. Always seek professional guidance when investing in risk-based investments.