Wealth Management

12 Days of Christmas: Nine Ladies Dancing

On the ninth day of Christmas my true love sent to me, nine ladies dancing. We mark Day 9 of the 12 Days of Christmas, with the nine elegant ladies dancing, and how exercising self control is key with dancing and with our investments, especially during periods of considerable volatility.

12 Days of Christmas: Nine Ladies Dancing

The nine ladies dancing are thought to represent the nine fruits of the Holy Spirit, which include love, joy, peace, longsuffering, kindness, goodness, faithfulness, gentleness and self control. Self control is an interesting quality that we can easily link to aspects of our lives but more importantly towards our behaviours and attitudes with investing.

During the more difficult and unprecedented times, it is important to exercise self control with your investments, as we saw this year with the effects of the global pandemic which were felt around the world. In the third week of March, while most of our minds were fixed on the surging coronavirus death rates and the almost apocalyptic scenes from hospital wards, global financial markets came as close to a collapse as they have since the stock market crash in September 2008. The price of shares in the world’s major corporations plunged and was the fastest fall of global stock markets in financial history.

When there are periods of volatility such as this, there is always an immediate reaction, stemming from fear and worry, that results in investors selling off their investments rather than holding onto them for the long term. Investing in the long term can help mitigate operation risk, as investment are less exposed to cycles and external factors. In addition, investing for the long term offers a number of advantages that investors who try to time the market, or day-trade over the short term, simply can't take advantage of.

There are many advantages to long-term investing and why it is undeniably the smartest and easiest path to achieving your future freedom. These include the ability to remove emotions from the equation, peace of mind knowing your money is working for you, less time monitoring stocks on a daily basis, the beneficial effect of compounding, the opportunity to earn from dividends, reduction of the impact of price fluctuations and investment risk. Why not exercise some self control with your finances and start your investment journey with us today - click here to get started.

The value of an investment and the income from it can go down as well as up and investors may not get back the amount invested. This may be partly the result of exchange rate fluctuations in investments which have an exposure to foreign currencies.

If you would like to read the previous article for the eighth day of the '12 Days of Christmas: Eight Maids A-Milking', please click here.