At the time of writing this, markets around the world are falling and the FTSE 100 is down nearly 4%. It is safe to say that markets are volatile at the moment and whilst this is a common feature of investment markets and is to be expected, it can be scary when it happens.

Given the headlines and the amount of coverage this recent volatility have received I thought it would be sensible to provide a reminder of the reasons why we invest and re-iterate on our views of the current market.

Firstly it is important to remember that short term volatility is exactly that, short term. It is a feature of the way that markets work. It is also worth remembering that your financial plan has been stress tested to assess the impact of falls such as these.

Your investment portfolio, whilst invested in stocks all over the world, is extremely well diversified. You will also be invested in other asset classes that sit alongside stocks, designed to ‘soften the blow’ of volatility and, depending on your own attitude to risk, your portfolio is only partially invested in the markets. This means that the falls that the stock markets are suffering are not the falls your portfolios are suffering.

Our advice during these times is to ‘stay in your seat’. There is a common argument raised during times of market falls that we should just sell and wait for markets to return to normal (whatever that is!). There’s two reasons why we this should be avoided:

Firstly, this would crystallise any losses that have already been made and secondly it assumes that we can go back into the market at the perfect time. History tells us that this is close to impossible to do and would require us to correctly guess markets three times!

Statistics show that more money is lost when trying to time the markets than by simply ‘riding it out’. Your investments are being held over the long term, as part of a comprehensive financial plan and having patience and discipline is the key to investment success.

We know that it can be scary but it is at times like this that we can really show our value and stop you from making the mistakes that the ‘average’ investor makes.