Investing Feeds

OK, unless you live in a cave in the middle of nowhere you must by now be aware of the turmoil hitting the global markets. With many of the major financial markets reporting losses of between 3 and up to 7 per cent on Monday (Thank god the American markets were closed) and at least £70bn wiped out of the FTSE 100 in The UK, there are real causes of concern for investors. However, the next day the markets were buoyed to some extent by buyers rushing in to snap up value shares.

In times such as these it is important to remember that there is no real way of predicting what might happen next. If you are thinking of rushing out to buy up shares that have lost value, be wary, the trough may not have been reached yet. If you have an investment plan, stick to it, if you run a portfolio of shares, even if those shares have lost value, do not panic sell.

An investor should have three sets of goals in mind when playing the market. Firstly he should have a long term strategy, a mix of shares in low risk, gilt edged investments which provide a steady return. Secondly, an intermediate strategy running over no more than one year, which would contain some speculative investments which, after analysis , the investor feels has medium term potential. Finally the Investor always needs to look at short run returns. Especially in troubled times, there are many stocks which dip and recover fast, enabling the canny investor to double small sums in quick turnaround investments. All of these strategies carry varying amounts of risk, from long-term which are low risk, to short term which are high risk. Balancing risk and return is the key to successfully investing. Be careful and only invest what you can afford to lose.