Download How market volatility can work to your advantage

investments
How market volatility
can work to your advantage
wHy
inve
s
n ow t
?
when stock markets are moving up and down so sharply it is natural for investors to be concerned
that they will ‘get their timing wrong’, investing one day only to see share prices fall significantly
the next.
of course, investors cannot consistently and successfully time the markets. nobody knows what the
stock market will do next week, next month or next year. But that does not matter if, for example,
you are saving for a pension and do not intend to retire next week, next month or next year. taking
a long-term view is what matters most.
one way to reduce the worry of investing at the wrong time is to invest on a regular basis. By dripfeeding your money into the market you have the potential to buy more units when share prices are
falling. when prices recover, you’ll have more units with a higher value.
Units bought with a monthly investment of £100
£2.00
Rising Market
Volatile Market
52
Unit Price
£1.50
£1.00
100
92
85
79
73
65
69
61
55
58
Investment B
100
150
50p
50
Investment A
150
200
250
200
300
350
350
300
7
8
250
0
1
2
3
4
investment a total value of units after 6 months
total units bought after 12 months
total value of units
5
6
Month
£721.74
839
£1,678
9
10
11
investment B total value of units after 6 months
total units bought after 12 months
total value of units
1
12
£385.71
2,700
£2,700
How ma rk et volatility c a n wor k to your a dva ntage
Investments
Investors will be concerned about the extreme volatility we’ve seen recently in world stock markets.
But by saving regularly or phasing a lump sum investment from cash into the market over a number
of months it is possible to benefit from the short-term ups and downs and, at the very least, reduce
the worry about investing at the wrong time.
Why invest now?
Neither professional nor private investors can get their timing right every time. If you are worried
about investing a lump sum just before prices fall, a simple way to reduce the risk of bad timing is to
make regular investments. Given current market volatility, now might be a good time to start.
Members of the St. James’s Place Wealth Management Group are authorised and regulated by the Financial Services Authority.
The St. James’s Place Partnership and the title ‘Partner’ are the marketing terms used to describe St. James’s Place representatives.
St. James’s Place UK plc: Registered Office St. James’s Place House, Dollar Street, Cirencester, Gloucestershire, GL7 2AQ, United Kingdom
Registered in England Number 2628062
www.sjp.co.uk
SJP3113-VR1 (10/08)