Looking Ahead

As we pass the middle of the year, it may be interesting to note that the markets have broadly followed a similar path of that of a year ago.

The biggest difference however, is that last year, many people saw light at the end of the tunnel, whilst this year people fear that beacon in the darkness is probably a TGV hurtling towards us!

That is because many of us remember, painfully, the events of last August when markets fell by something in the region of 15% in a very short period of time.

However it is vital that investors focus more on the long term than the short terms bumps of pretty high levels of volatility which are presenting themselves. (Let us explain why this should be a part of your investment strategy, too.)

"Markets are driven by macro events at the moment. The Eurozone is pushing prices up or down with each announcement or downgrade," says Chase De Vere's Patrick Connolly.

This volatility is hampering predictions being made, but valuations as they are in the long term there can be only one winner, as equities outperform bonds.

"The safest assets have become more expensive and will likely get even more expensive, while the riskier assets meanwhile will get cheaper and cheaper," according to Graham Toone at AFH Wealth Management.

August can be a volatile month at the best of times, lets see what it brings in the 2012 edition.

Posted in: Financial Advice , long term investing , Volatility