Hartlepool-born Harrison Smith is a financial adviser based in his hometown’s Greenbank business centre and is associated with Emerald Associates. Harrison offers an insight into money matters in an exclusive monthly column for North East Connected.
It’s interesting how client contact can fluctuate. Sometimes, a client might go months without speaking to me. Then, when a major event occurs, they might suddenly ring me in my role as a financial adviser multiple times in just a few days, desperate for an update on their investments.
For a recent example, you don’t need to look too far, all you have to do is read the flurry of news headlines that followed Donald Trump’s announcement of tariffs.
I’m not going to delve into the intricacies of his policies or his political stance, but we can certainly say that Trump’s decisions have had a major impact on investments and markets worldwide.
Over the last couple of weeks, we’ve seen a period of significant volatility, which has caused anxiety for many people with pensions and investments. A quick glance at the performance of various market indices over the last month on a stocks app is enough to get a sense of the volatility in the air.
Being a financial adviser can be smooth sailing when things are going well. However, it’s during short-term periods of uncertainty, like the current climate, that we truly earn our keep. People want answers.
At times like this, my clients look to me for honesty, clarity, and confidence. That can be challenging when no one can definitively predict what will happen tomorrow. It’s difficult to forecast what’s around the corner.
The ongoing tariff disputes between the USA and other countries has had serious repercussions on the markets, and this is likely to continue, at least in the near future.
What I want to repeat, and stress is that no one can know with absolute certainty what will happen tomorrow or the next day.
However, while there’s no crystal ball to predict the future, we can look to history for context, even though past performance isn’t a guarantee of future results.
Long-term investment trends can provide a reassuring perspective when considering potential future outcomes.
Let’s consider the last five years alone. The world, and particularly markets, have had to navigate the pandemic, the cost-of-living crisis, changes in governments, the Russia-Ukraine war, and, most recently, the tariff disputes. And that’s just to name a few.
During each of those events, we’ve seen similar levels of volatility and the same kind of investor anxiety that we’re experiencing now, as markets often react negatively to such events.
However, as I’ve stressed in this column before, and will continue to emphasise, the key in all of this is the investment horizon.
Understanding your investment horizon and remembering your original investment goals are two straightforward ways to reassure yourself about your overall direction.
Reflect on where you’ve been, what you’ve already weathered, and where you ultimately aim to be. Remember that when you invest, you’re purchasing units at a specific price at the time of purchase.
The number of units you own remains the same, regardless of whether the value of your investments increases or decreases.
It’s not your ownership that changes, but the value of that ownership.
Some of you may be in a situation where you have immediate plans to access your investments. If so, now might be a good time to discuss your options with a financial professional to gain clarity on the best course of action.
But if you’re still investing for the long term and have time on your side, patience is usually the best approach. Don’t forget that.
*To contact Harrison, check out his adviser hub: https://linktr.ee/harrisonsmithea [linktr.ee]