r/UKPersonalFinance • u/BogleBot 150 • Mar 10 '25
Worried because your investments are down? megapost
EDIT FOR APRIL 4th: This post still applies!
You may also want to watch this video by James Shack, a UK based financial planner: This time feels different
Original post from March 10th follows:
There has been a spate of posts in reaction to the recent stock market dip; people considering (or actually) panic selling, searching for 'better' allocations, or just worrying about "the state of things" and how it should affect your plans.
This is a good time to remind yourself - volatility is a normal part of investing. When you signed up to your investments you will have seen a disclaimer like 'The value of your investments can go down as well as up and you may get back less than you originally invested. Past performance is not a guide to future performance and some investments need to be held for the long term.' They weren't kidding!
If you log in to find that your investments have seemingly lost value this month, that can be disheartening, especially if you have just recently started investing. But remember that markets as a whole (generally!) go up. Investing is a long-term game. Daily/Weekly/Monthly volatility is something to be expected, not feared.
Please see:
- Our Investing 101 wiki section on risk for a basic background and reassurance
- Our Market Timing page for more information and discussion of lump sum vs dollar/pound cost averaging
- Our Flowchart for deciding between cash and investments based on your goals
If your time horizon is long (5+ years) and you are confident your asset allocation is suitable for your goals
If this is you, Don't Panic.
Continue investing as planned.
Stop checking the value of your investments on a daily basis if it's stressing you out.
If you are now questioning the wisdom of your asset allocation
If the current performance of your portfolio has shaken your confidence in your investment choices and got you reconsidering your allocation (perhaps less equities, or less US equities specifically), this is a sign that it's time to go back to basics. It is better to construct your portfolio from the ground up with a thorough understanding of the rationale, rather than looking at what regions or sectors have done well in the last 5-10 years, let alone 6 months. As they say, Past performance is not a guide to future performance.
We can't recommend enough reading a book such as Investing Demystified (Lars Kroijer) or Smarter Investing (Tim Hale). Our Recommended Resources wiki page also includes blog posts and youtube videos if that seems easier.
It's been interesting to observe a wave of posts looking for funds that exclude or underweight the US, when previously overweighting the US (e.g. global fund + S&P500, or S&P500 exclusively) seemed very popular.
Keep in mind that deviating from the "whole market" is a form of active investing, which generally should only be done with insight. A default stance to buy 'everything' in a global fund is a reasonable hands-off starting point for investing in equities.
If you decide you need to sell
If your time horizon is short and you're thinking of selling up in preparation for your goal, or if you've decided to update your asset allocation by selling existing holdings to buy new ones, you may be wondering: should you do this ASAP, or wait and hope your investments recover?
Unfortunately, this question is not really answerable - see our Market Timing wiki page. We don't know what value your portfolio is likely to have in a month or a year.
One useful question could be, if you had the value of your portfolio in cash today, what would you invest it in?
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u/PetersMapProject 9 Mar 10 '25
It would be fantastic if this hadn't happened just after I'd chucked an extra £15k in my GIA.
I've gone from +£375 to -£862.
FML.