Wealth strategies update

Share market falls – seven key things for investors to bear in mind

Much of the time share markets are relatively calm and so don’t generate a lot of attention. But periodically they tumble and generate headlines like “billions wiped off share market” and “biggest share plunge since…” Sometimes it ends quickly and the market heads back up again and is forgotten about. But every so often share markets keep falling for a while. Sometimes the falls are foreseeable (usually after a run of strong gains), but rarely are they forecastable (which requires a call as to timing and magnitude) despite many claiming otherwise. In my career, I have seen many periodic share market tumbles and so they are nothing new. And now it’s happening again with share markets falling from record highs just a few weeks ago. From their all-time highs to their lows in February US shares have fallen 9%, global shares have fallen 8% and Australian shares have fallen nearly 9%. Always the drivers are slightly different. But as Mark Twain is said to have said “history doesn’t repeat but it rhymes”, and so it is with share market falls. This means that from the point of basic investment principles, it’s hard to say anything new. Which is why this note may sound familiar with “key things for investors to keep in mind”, but at times like this they are worth reiterating. Continue reading below.