Case Study: Time in the market - Is it possible to weather the storm?

  • Cara Casey
  • 19 April 2023
  • 5 mins reading time

Instead of trying to predict when the market will rise or fall, our view is that it’s more effective to remain invested for the long term, this way, you are giving your money a greater chance to grow. Hear how Adviser, Jonathon Bithell, advises his clients to remain focused on achieving their financial goals during times of market volatility.

Could you tell us a little bit about how you got to where you are today as a Financial Adviser?

I’m very passionate about helping people achieve their financial goals. I also want to leave a positive impact on my clients’ lives and being a financial adviser here at Schroders Personal Wealth (SPW) allows me to do exactly that. The intellectual challenges of the industry also appeal to me and I appreciate the opportunity to continue learning and I hope to soon achieve Chartered status.

Each client you form a relationship with and give advice to is different. They have different needs, circumstances, preferences, and willingness to take risk. In times of uncertainty, how do you highlight to your clients, the importance of staying invested? Is there a key piece of advice you tend to share with all clients?

When conditions in the market change to become volatile or unpredictable, clients may react by wanting to pull money out of their investments or choose to wait to see if the market improves before they begin to invest. In such circumstances, it is important to reiterate to the client that you cannot predict the short term. What is beneficial, is making decisions that you can reap the benefits from over the long-term. By remaining invested over a long period, you give your investments the chance to withstand any short-term fluctuations.

As a financial adviser, it is my job to create the right financial plan that is best suited to the needs and preferences of each client and investing for the long-term is one of our key principles at SPW which aims to help clients reach their financial goals. So, it is important to see the tough times through as staying in the market generally allows for steady growth over time.

Is there a particular scenario that you’ve experienced with a client where you’ve helped them to fully understand the importance of investing for the long-term, so advising them as to how beneficial investing for 5 years can be?

I had a client who was nervous about the markets during the Covid-19 pandemic. The client had been investing monthly for a couple of years and during this time their portfolio had grown steadily. Within the first two weeks of the pandemic, the largest US stock market, the S&P Index, dropped by 25% and understandably my client was nervous and reached out to me. She voiced her concerns and questioned whether she should withdraw funds or continue with her monthly investments.

Through talking with her and reiterating the importance of staying disciplined and focused on her long-term goals, she began to understand the benefits of staying invested and due to feeling more informed and confident, she chose not to withdraw her funds. A couple of months after this conversation, the S&P 500 had recovered to its pre-Covid levels and the client’s portfolio had regained the losses that it had experienced during the initial downturn. The client was pleased that they had maintained their discipline and were able to weather the storm.

Important information

Cash savings and investments are protected to the value of £85,000 per person per institution by the Financial Services Compensation Scheme (FSCS).

However, the value of investments may fall as well as rise and are not guaranteed. The investor might not get back their initial investment.

Fees & Charges apply at Schroders Personal Wealth

The different scenarios discussed are examples and what is right for each person will depend on individual circumstances.

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