So there’s been plenty of headlines and plenty of news coverage but now interest rates are up, are investment changes required?
At one point this week I was amazed by just how much coverage the team at the Bank of England (who decide what interest rates should be) were getting. It felt like this was the biggest news event of the year and what was the result? A tiny increase of 0.25%. The official bank rate now stands at 0.50%.
All the talk was that this is the first increase since 2007. But let’s put things into perspective. All this increase really did was put things back to where we were before the Brexit decision last year.
So now interest rates are up should you be making investment changes?
As an investor should you be worried? This is a really easy one to answer. The answer is no.
But the key word here is ‘investor’.
If you’re an investor you don’t worry what the stock market does from day to day, you don’t care what economic stories are making headlines and you don’t listen to all the noise from ‘investment managers’ trying to force you into changes.
Investing should be simple and a true investor is clear on these 3 key points:
- The reason they are investing.
- How much risk they are prepared to take.
- How long they are investing for.
So no, an investor shouldn’t be making any changes at this point because their strategy should be built to deal with the various economic and market cycles. The only reason to change your investment strategy is if there has been a change in your circumstances and a change to one or more of the 3 points above.
If you are someone that is checking your investments daily and making changes as and when you hear different bits of economic data then I’m afraid you’re not an investor, you’re speculating and paying higher costs while you’re at it!
If you want a stress free solution that ensures your money provides you with the lifestyle you desire then give us a call.
Risk warning:
Stock market linked investments and any income from them, can fall as well as rise and is not guaranteed. Any figures quoted are for illustrative purposes and should not be taken as a forecast or guarantee. Past performance should not be seen as an indication of future returns and clients may get back less than they have invested.
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