As we reach the halfway point of 2022, our CEO and co-founder, Giovanni Daprà, has taken the opportunity to check in with our clients and give an update on both Moneyfarm and the markets. It’s been a tricky six months, after a prolonged period of relatively consistent growth stretching back to the period following the financial crash (barring a few rocky patches in the interim).
In the first half of 2022, a few different strands of economics and geopolitics came to a head. Inflation has reached generational highs, the war in Ukraine continues and issues with global supply and trade have been exacerbated after cracks appeared during the pandemic.
Should investors be concerned?
Not in the long run. Markets are, by their very nature, cyclical. Periods of volatility are just as much a part of investing as periods of prolonged growth. It’s also worth noting that despite all the problems, we’re still seeing record employment and positive economic growth in a number of key geographies.
Having said that, it’s never nice to see volatility in your portfolios. It’s also true that the economic situation could remain difficult for some time. It’s during these periods of negative performance that our role as a wealth manager takes on a different importance. Our team of asset allocation specialists took action towards the end of last year and have rebalanced portfolios since, to reduce the risk inherent in them and make them more resilient in the face of volatility. It’s a measure that appears to have paid off. We’ve been able to, at least partially, shield our clients from the full impact of the negative market swings.
Another key part of our role is to give investors the tools to react to situations like these from an objective, analytical perspective. Ultimately, acting on impulse almost never pays off when investing, and never is this more true than in negative periods. Selling in these moments risks crystallising your losses, selling at a lower price, and ensuring that you miss out on the recovery when it does eventually arrive; it’s a situation we’ve seen many times before. History tells us that, sooner or later, the situation will improve and, in this instance, there’s plenty of room for growth when that happens.
A busy six months for Moneyfarm
For now, we’ll continue to work, not just on your portfolios but also on our service. Recently, we added Socially Responsible Portfolios and the Junior ISA to our range of products and we’re ready to once again give Moneyfarm customers more options. We’ll share more information about these new products in the coming months.
Also, we recently welcomed on board our new clients from Wealthsimple following our acquisition towards the end of 2021. We hope that, despite the difficult circumstances, you are all finding the Moneyfarm service useful and accessible. We look forward to getting to know you all better as you spend more time with us and the situation in the market improves.
Finally, we’ve added some new faces to our senior leadership team – we’re excited to see the fresh ideas that they bring to the table and where they can help us take Moneyfarm over the coming years.
If you want to get in touch to discuss your portfolio, your long-term financial goals or the potential to take advantage of the market volatility, feel free to get in touch with a member of our investment consultancy team.
*As with all investing, financial instruments involve inherent risks, including loss of capital, market fluctuations and liquidity risk. Past performance is no guarantee of future results. It is important to consider your risk tolerance and investment objectives before proceeding.
