Well it looks like asset prices don’t always go up. Of course I’m not surprised by this revelation but the mainstream media did seem surprised with headlines such as “Dow loses 7 million points in the session” and “Worst market performance since dinosaurs roamed the earth” but then of course they need sensationalism as they’re attention seeking. The market action even meant that it made the first news item on the radio for a couple of days. It could almost be 2008 again. It would be enough to scare people off investing if they did nothing more than listen to news sound bites.
What has really happened thus far? I say thus far because the market can of course continue to fall... Or it might flat line... Or it might go up again... By my calculations this week the S&P500 has fallen 5.2%, last week it fell 3.9% and the week before that it actually gained 2.2%. In contrast the FTSE100 this week fell 4.7%, last week fell 3.9% and the week before that fell 0.8%.
This is what has happened to a couple of single indices and makes for great news items but how has this impacted a long term investor who buys, holds and rebalances a variety of global asset classes. I like to think I’m one of those so let’s use my real world portfolio as a comparator. This week my wealth has decreased by 2.3%, last week it decreased by 1.5% and the week before that it decreased by 0.4%.
What has really happened thus far? I say thus far because the market can of course continue to fall... Or it might flat line... Or it might go up again... By my calculations this week the S&P500 has fallen 5.2%, last week it fell 3.9% and the week before that it actually gained 2.2%. In contrast the FTSE100 this week fell 4.7%, last week fell 3.9% and the week before that fell 0.8%.
This is what has happened to a couple of single indices and makes for great news items but how has this impacted a long term investor who buys, holds and rebalances a variety of global asset classes. I like to think I’m one of those so let’s use my real world portfolio as a comparator. This week my wealth has decreased by 2.3%, last week it decreased by 1.5% and the week before that it decreased by 0.4%.