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The importance of sticking to your investment strategy

JTB Studios
Private Client Adviser
24 Mar 2020

Last weekend, we saw the Australian government announce a further $66 billion stimulus package with the plan to boost the economy and help businesses stay alive. Despite that, the closure of non-essential services saw the market continue its volatility this week.

No doubt, seeing the value of the sharemarket fall significantly over a short period of time can be stressful. While nobody knows when this ordeal will be over, it is important that investors stay level-headed and stick to their strategy. Just because the ‘on-paper’ value of an asset reduces; you never actually lose, or gain, any money unless you sell it.

We also need to remember that as fast as the sharemarket can fall, it can rise just as fast. This was evidenced in 2009 following the depths of the global financial crisis, when the ASX rose 26% by the end of the calendar year.  

At Hewison Private Wealth (HPW), we can’t emphasise enough the importance of sticking to your long-term investment strategy especially during times like this. If you are a HPW client, your portfolio is likely to be well-diversified across different asset classes.  The benefit of this can be two fold; your portfolio should not have fallen as much as the sharemarket, and you may be able to rebalance your portfolio to purchase assets while they are ‘discounted’.

As quoted by Benjamin Graham (one of Warren Buffet’s greatest teachers) – “think of shares as more than just a ticker symbol. Think of it as an ownership interest in an actual business with an underlying value that does not depend on its share price.”

While it may seem counterintuitive to be investing in shares today, if you have confidence in the long-term prospects of the business, don’t let the current market movement deter you.








Hewison Private Wealth is a Melbourne based independent financial planning firm. Our financial advisers are highly qualified wealth managers and specialise in self managed super funds (SMSF), financial planning, retirement planning advice and investment portfolio management. If you would like to speak to a financial adviser on how you can secure your financial future please contact us 03 8548 4800, email info@hewison.com.au or visit www.hewison.com.auPlease note: The advice provided above is general information only and individuals should seek specialised advice from a qualified financial advisor. The views in this blog are those of the individual and may not represent the general opinion of the firm. Please contact Hewison Private Wealth for more information.