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Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.

An insight into how the Shares team are currently thinking about events
Thursday 26 Mar 2020 Author: Daniel Coatsworth

Investors around the world will have seen the value of their portfolios fall this year, some by a large amount. Understandably many people are worried about what could happen next and they are thinking more about turning their assets into cash rather than making investments at cheaper prices.

There is a growing concern in many households about job security. The last thing some people want to do is risk putting more money into the markets, only for it to potentially fall in value. After all, we’ve got quite used to seeing 3%+ falls in the stock market on a daily basis for the last month.

We don’t know when markets will recover in earnest, nobody does.

Under these circumstances, you might suggest that we temporarily stop offering investment ideas in the magazine.

We have thought seriously about the issue and have concluded that there is still a large chunk of people who are looking for ideas at depressed prices.

Ideally individuals putting money into the markets should only be ones fortunate enough to have spare cash and an appetite for risk. Importantly, they should be focused on the long-term and accept there could be short-term bumps along the road with their investment journey.

In times like these it is vital to get your personal finances in order before you make any investments. If there is any chance your normal salary could be reduced then you need to ensure you have spare cash to pay the bills and any loan repayments. Only once they are factored in should you think about topping up your investments or deploying cash already in your account.

Remember you can drip feed cash into any of these accounts and invest later if you’re still nervous. That way with ISAs in particular you would still be able to make the most of the annual allowance before the end of the tax year.

For now we are going to tailor our investment ideas towards stocks that are in a strong financial position and funds run by managers with a proven investment process and where we have confidence that they will make the right decisions to generate value over time.

We care about our readers and don’t want to add to people’s worries by suggesting to trade the market looking for opportunities to make a quick buck. Timing the market is very hard and getting it wrong could compound your losses.

Above all, the most important thing at the moment is to stay healthy.

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