Wealth protection in uncertain times

How prepared are you when it comes to protecting your savings and income? The trick is to keep sight of your long-term investment goals and risk appetite, even when uncertainty hits.

Thomas Edison could have been talking about wealth management when he said: “Good fortune is what happens when opportunity meets with planning”. And now is certainly the time to review your finances, invest in a plan and take steps to protect your savings from inflation.  

Planning is especially important when markets become volatile. Events in recent years have shown multiple drivers of financial change happening simultaneously which can be very unsettling for markets such as interest rate hikes, soaring inflation, slowing global growth and geopolitical events.

Faced with so many question marks about the direction of the economy, living standards and equity markets, investors are naturally concerned about their portfolios. Fear, one of the biggest drivers of investment market movements, can lead to rash decisions and impulsive actions.  

If people react emotionally to concerns that their portfolio could lose value in the short term, they might miss out in the long term. That’s because, despite current economic woes, long-term planning using expert insights and high-quality research underpins sound investment decision making. Investors who hold their nerve and their investments for long periods usually see their portfolios overcome recessions and economic cycles.  

Be prepared

So, rather than making any knee-jerk reactions, it’s far better to have in place a tried-and-tested financial plan capable of withstanding periods of uncertainty. Your financial plan should align with your investment objectives and the level of risk you’re comfortable with.

Understanding the amount of risk you’re exposed to in your portfolio is essential. Ask yourself, what would happen if it lost some of its value? Would you still have enough money to support your lifestyle – and your dreams?  

Review plans regularly

When reviewing your financial position, you should decide if your risk profile has changed. This will depend on your stage of life. For example, is your priority protecting and growing your wealth? Managing that wealth as you prepare to retire? Or preserving your wealth in retirement with a view to passing it on? By adjusting your financial plans to reflect your situation, you should be able to sleep easier knowing you’re on course to reach your financial goals.  

How often you review your finances is up to you, but we recommend doing it at least annually and ideally every three months. Also, a review shouldn’t be confined to periods of economic uncertainty and investment market volatility. After all, your financial objectives and risk appetite will evolve throughout your life.  

Enlist the experts

It always helps to talk to an expert, but where to start?  

More and more people are looking to integrated wealth management as it provides a complete service. It aims to maximise the value of your assets while keeping them aligned with your risk profile and financial goals.  

It goes without saying that the person you choose should have the right credentials as well as being someone you like. After all, they will be sharing your journey, not just today but – hopefully - long into the future.