I was lucky enough to attend an investor event in Leeds recently and the subject everyone wanted to discuss was confidence or at least the lack of it.

There are plenty of reasons investors are feeling shaky not least concerns about the potential impact of the Israel-Gaza war and, closer to home, fears that inflation might prove stickier than had been hoped.

CONSUMER CONFIDENCE ON THE FLOOR

Consumer confidence, both in the UK and in the US has dropped away, not the kind of trajectory that warms hearts as we plough deeper into the ‘golden quarter’.

That lack of confidence, that uncertainty is influencing investor behaviour and shaping global financial markets with both the FTSE 100 and 250 down since the start of the year – the latter almost 10% as UK shares struggle to find the front foot.

But it’s crucial not to make short term decisions, to remember that current instability will be transient and that investing as a long game means downturns can actually present opportunity.

Looking back to 2020 as mutterings about Covid-19 turned into pandemic lockdowns, confidence took a similar dip with several big stocks diving and some new names emerging as pandemic winners.

The oil price plummeted as the global economy ground to a halt. It’s almost surreal to remember shuttered shops and discussions about negative interest rates.

Fast forward to where we are now, and those stocks have enjoyed impressive gains as the world continued spinning and what passes for normal service has been resumed, all be it with a few inflation-fuelled tweaks.

PANDEMIC WINNERS BECOME POST-PANDEMIC LOSERS

Conversely many pandemic winners have become post-pandemic losers. Homeworking has become entrenched, but we’ve adapted to a hybrid model which has lessened the ubiquity of video conferencing services and now we don’t have to queue around the supermarket car park, popping to the shop is a much more desirable option for people more interested in bargains than convenience.

There’s always an outlier and UK housebuilders only enjoyed a brief moment of optimism before the weight of increased borrowing costs caused the sector to buckle.

But with a UK election hurtling towards us expect a plethora of housebuilding pledges and schemes to help buyers get on or climb up the ladder.

While we can all spot potential opportunities, without a crystal ball or some kind of Warren Buffet-esque superpower it’s impossible to predict the timing of stock market fluctuations but the man himself advises us ‘to look at market fluctuations as your friend rather than your enemy’.

In the last couple of weeks there have been countless articles espousing the virtues of refreshing your stock shopping list, targeting companies you’d rather like to add to your portfolio if they reach a price that appeals. And it’s here that the unsettling volatility, those fluctuations can actually work in your favour. Risk isn’t a bad thing, its just a measure of how you feel about your finances and your financial future.

Mitigating that risk doesn’t mean playing it safe. It doesn’t mean throwing everything into a cash cushion because the returns on cash savings look positively obscene compared to what we’ve been used to over the last decade. We’ve all come up close and personal with inflation.  We’ve experienced its impact on our living standards, on our wages and its crucial we understand that our savings aren’t exempt.

TIME IS YOUR FRIEND

So many people I spoke to in Leeds hadn’t really got to grips with that little conundrum and its understandable that headlines about war, about geopolitical uncertainty are taking a toll on people’s investing confidence. But like life, markets are cyclical and despite the dismal outlook the current crop of earnings has been remarkably robust.

Buying the dip isn’t new and whilst there are no guarantees that past performance will be repeated; finding good value, good quality opportunities from that dip is a favoured tactic of many an institutional investor. Remember time is your friend, even if you’re not feeling particularly confident today.

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