Following the first successful vaccine trials in late 2020, global stock markets have been performing strongly. This positive news and hope for the future had helped propel global share prices to increase.
For example, in the United States, the S&P 500 Index exceeded the 4,000 level. This happened for the first time ever, which is exciting news to say the least after its drop to below 2,500 in March 2020. The United Kingdom is also seeing positive changes, with the FTSE 100 index hitting the 7,000 mark.
With the influx of “new highs” being hit by markets over the past few months, many people may be questioning whether it is sensible to invest right now. However, this uncertainty, which is being exacerbated by low interest rates, isn’t necessarily a reason to stop investing altogether.
Here are some strategies you can consider while the markets are close to, or at, all-time highs:
Spreading your investment contributions
Instead of investing a lump sum, it’s a good idea to drip feed your investments and spread them out over a longer period of time. This strategy will help to ensure that you’re not investing all of your money at market peaks, giving you the chance to maximise your return and assess opportunities in the market over time.
Keeping a cash reserve
If you need funds quickly in the future, it’s wise to have an appropriate cash reserve ready just in case. This will allow you to have access to funds that can be used as a deposit in the event of an opportunity revealing itself.
Stay aware of risks
As with all investments, it’s important to monitor market trends to ensure you’re staying ahead of potential risks. If you intend to withdraw an investment immediately, a drop in values can dramatically impact the sustainability of your withdrawal. In order to mitigate this risk, it’s a good idea to keep hold of a separate, lower risk reserve.
How KLO Financial Service can help
Our team of financial advisers have many years’ experience in investment management and financial planning. Backed by our in-house investment analysis and portfolio diversification, we will discuss and analyse your assets, objectives, and risk tolerance to design a portfolio that gives you confidence and control.