Wednesday, 26 August 2022
Written by MYTHEO
Back to Main Blog
As bearish as sentiment has gotten, should investors really be this concerned about a recession and its market impact?
That was a key question we asked our highly experienced Chief Investment Officer, Matthew Stuart-Box, at our latest #MYTHEOLive Webinar: Should Investors Fear a Recession?
In case you missed it, you can watch the full webinar here, but in the meantime here are 3 key takeaways we think you should know:
1) Timing the market is difficult. Extremely difficult. This isn’t new, market timing has long been touted by some as a losing game for most investors in the long run. Even if we know that recessions and market crashes happen every so often, attempting to wait and only invest after a bear market has runs its course could have investors waiting for a long time, potentially missing out on a lot of the upside when the bulls come marching in again, as Matthew discusses here.
2) Make Dollar-Cost Averaging your friend. There’s no doubt that bear markets can be scary, but the market has proven that it will bounce back eventually. As Matthew noted in the webinar, Dollar-Cost Averaging is a very powerful behavioural tool that can build the essential habit of investing for long-term by helping take the emotion out of investing through automatic and consistent deposits, no matter the market condition.
3) Not all diversification is created equal. Diversification isn’t simply about putting a few different assets together and leaving it at that, this can very easily become “Diworsification”. Buying a tech fund here, an Emerging Market Unit Trust Fund there, and putting it alongside an S&P 500 index fund, is not the same as putting together a highly personalised selection of high-quality ETFs, as MYTHEO does. Diversification, when done appropriately, is about making sure an investor’s portfolio works holistically, helping them achieve their desired level of return with minimal risk.
At MYTHEO, our algorithms will build and maintain a highly personalised portfolio for you, automatically rebalancing and re-profiling your investment portfolio regularly to ensure it still matches your financial goals and risk tolerance.
With MYTHEO handling the A-Z’s of investing, you just need to sit back and relax.
Find out more about MYTHEO’s automated portfolios on our app or website today!