Pension savers will rightly feel very confused and conflicted with the direction of their portfolio and the outlook for the immediate future.
In the past 18 months or so, markets have been subject to a series of very significant macroeconomic events.
A spike in post-pandemic demand for goods and services (combined with seriously-constrained supply chains) led to inflation way higher than previously forecast and central bankers scrambling for control.
This was followed in relatively quick succession by the Russian invasion of Ukraine. Over the last year, base interest rates have risen at an incredibly high rate, from close to 0 per cent up to 4 per cent and beyond.
The true effect of rate rises is not seen for many months afterwards and this is playing into the current non-direction of capital markets.
For now, our advice to retirement savers is to focus on the longer-term plan, maintain a high level of diversification and engage with active management and advice to ensure that threat and opportunity are reflected in equal measure.
As is often quoted, “time in the market beats timing the market” - with investor patience being rewarded over the medium to long-term.
Staying invested and keeping to an agreed financial plan is the optimum approach to keeping your pension strategy on track.
If you are worried that you ‘should’ be doing something, we’re here to answer questions and offer advice and guidance.
Simply having someone that has your best interests at heart to talk to could prevent hasty decisions that may not be in the best interests of your long-term financial plan.
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