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Hugh’s Views – Market Volatility

Hugh’s Views – Market Volatility
Needing some peace of mind during the current market volatility?
 
Well, our very own Managing Director Hugh Robertson has just shared his views on the current market and provided some context as to what the team here at Centaur Financial Services has been talking about with our clients, especially during this troubling time.
 


The transcript can be seen below:

Hugh Robertson: (00:03)
Hi, everyone. Hugh here from Centaur Financial Services. Of late, there’s been a lot of current market volatility so I just want to provide some context as to what we’ve been talking with our clients about, which will hopefully give you some peace of mind during this troubling time. Obviously, we started the year worried about the rising interest rates and was going be the impact of inflation as a consequence of the last few years, and then on top of that and to add to the drama, we had the Russia and Ukraine conflict, which obviously from a humanity point of view this is quite tragic but that doesn’t mean that it’s necessarily tragic for our portfolios or our investments. So, I just want to provide a little bit of context that we’ve provided to our clients that hopefully will give you some peace of mind and really help you from not panicking and doing something adverse, like selling down a portfolio, which when it’s not a good time to do, or it’s not for the right fundamental reasons.

Hugh Robertson: (00:59)
So if we go through some history since Pearl Harbor there’s been 21, what we would call market shocks, including these global conflicts as you’ll be able to see in the chart. What we know from there is it’s taken 22 days from the market to bottom and then 47 days from the market to recover. So, we know that based on what we’ve seen historically, while it’s not very, you know, it’s terrible for humanity, the financial situation isn’t that bad. If we then go and look at the next slide that we can see from 1926 to 2013, including all that time, the average large cap share market, US return was 10%. And for the small caps, it was 11.6%, really good returns in their own. Right. And that includes the wars, that includes recessions. So good outcome.

Hugh Robertson: (01:57)
Really interesting fact that if you actually go and look at just the investment returns during when the wars were on the return, actually bumps up to 11.4% for your large caps and 13.8% for your small caps. So, you can actually see that you’ve done better during those periods of war, than you have during the ordinary non-war times. So, it’s really good food for thought, and it really leads to the idea that it’s not the time to panic right now. We know that the time to recover, shouldn’t be too long on a historical perspective and if we can stick to our long-term plan, you’re going to do okay. The challenge for us is always to make sure we’re not speculative and make sure we’re not taking too much risk. Everything that we do has got to pass us sleep at night test. And certainly, that’s something when we are talking to our clients about that’s one of our big goals for them is have a strategy in place.

Hugh Robertson: (02:44).

That’s working towards a plan that’s going to achieve their goals so they can live the life that they want. Hopefully, this has helped you. And we’ve also put in just at the end here, an investment charge of long-term returns. So, what you can see on this is that it starts in a bottom corner, ends in a top corner, there is a lot of volatility in investing. No, one’s going to say there’s not, but if we can hold it out for the long term, we’re going to be okay. So, I hope that helps, uh, and good luck. Thank you. Bye.

End of transcript.

The information provided on and made available through this video does not constitute financial product advice. The information is of a general nature only and does not take into account your individual objectives, financial situation or needs. It should not be used, relied upon, or treated as a substitute for specific professional advice. We recommend that you obtain your own independent professional advice before making any decision in relation to your particular requirements or circumstances. Centaur Financial Services do not warrant the accuracy, completeness or currency of the information provided on and made available through this video. Past performance of any product discussed in this email is not indicative of future performance.

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The information provided on and made available through this website does not constitute financial product advice. The information is of a general nature only and does not take into account your individual objectives, financial situation or needs. It should not be used, relied upon, or treated as a substitute for specific professional advice. We recommend that you obtain your own independent professional advice before making any decision in relation to your particular requirements or circumstances. Centaur Financial Services do not warrant the accuracy, completeness or currency of the information provided on and made available through this website. Past performance of any product discussed on this website is not indicative of future performance.

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