Word on the Street #189 How has market and political volatility affected investments?
Nov 10, 2022
Will Hobbs, Chief Investment Officer at Barclays, shares his expertise on navigating investment challenges during turbulent times. He discusses how political and economic volatility influences market behavior and investor sentiment, emphasizing the importance of a long-term strategy. The conversation highlights opportunities for growth amidst market fluctuations and the critical role of diversification and technology. Hobbs encourages investors to stay resilient and adaptable, reminding them that sound investment practices can lead to success regardless of short-term chaos.
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Impact of Interest Rate Surges
- Unexpected rapid interest rate rises have been the main market force this year globally, especially in the US.
- Inflation fueled these hikes, causing unusual simultaneous drops in stocks and bonds, challenging typical investor outcomes.
Stay Calm and Invest Long-Term
- Investors must hold their nerve and stay focused on long-term goals despite short-term volatility.
- Avoid being swayed by frequent news or political events which usually have limited long-term investment impact.
Viewing Market Turmoil in Context
- People tend to overestimate the extremity of current times compared to historical context.
- Moments of turmoil can also spur technological and institutional advances, not just setbacks.