Greece is the Word

The concerns over Greek debt are weighing heavily on the stock market as those in power failed to agree a second bail-out of debt-stricken Greece.

As investors, it pays to remind ourselves that stock markets react to sentiment in the short term. In fact they react very quickly and are incredibly sensitive.

As Warren Buffett, the American investor, industrialist and philanthropist put it –

“In the short run, the market is a voting machine, but in the long run, it is a weighing machine.”

What’s not helping is the lack of clarity from the authorities, which creates uncertainly and worry that’s driving down stock prices, as the markets anticipate the ‘worst case scenario’.

Even if Greece successfully restructures its debt, the concern is whether it will default on its obligations.

Our clients in the main are not investing over the short term so the sentiment of the day is not a concern to them. On the contrary, they are playing the long game, remaining patient and in conjunction with our help, ensuring that they are not falling foul of some of the common investment mistakes:

• Following the crowd.
• Investing into areas that you do not understand.
• Failing to ‘diversify’ your investments. What proportion of your total “net worth” consists of property assets for example?
• Following the latest investment ‘fashion’ rather than building a sensible, well diversified investment portfolio.
• Investing when markets are high and selling when they are low.

Warren Buffett sums this one up again when he said – “Risk comes from not knowing what you’re doing.”

At Loughtons we can help you to invest effectively by avoiding these and other common mistakes.

If you would like to discuss your own circumstances or wish to make a positive difference to your own finances, please feel to call us on 01626 833225 to find out more.