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                  May 2020 Your business In scientists I trust SPONSORED COLUMN Does the stock market affect my pension pot? By Andrew Tricker, Wealth Management Director at Lubbock Fine Wealth Management 13     In mid-April LCCI chief executive Richard Burge considered the role of experts in the pandemic and applauded them for giving us th down. This is not a reaction based on any inside knowledge, just I am just trying to read the runes. And where do those runes come from? For me, the most important ones are those of the scientists and medics who stand alongside the ministers during the daily briefing from Downing Street. Evidence It is a long time since I was trained as a scientist (as an evo- lutionary biologist specialising in mammals) and I do not claim to be a scientist now. But I do retain that way of thinking; that approach to understanding what the evidence tells you at that moment in time. It demands huge humility. Be- cause every time you make a deci- sion based on your current under- standing, you have to stand ready to be proved wrong or misguided by new evidence that may appear with- in minutes. It is tough, especially when the public and the political world expect you to know, and for that knowledge to be certain, and for that certainty to be proved right by your consequent actions. So the runes can only be what we under- stand now, today, this minute, and not what we may know tomorrow. Part of the dialogue But something is different now. Most people in the UK are relatively highly educated. The vast majority have been schooled for at least 10 years, and can read write, and un- derstand figures. People expect to be treated seriously and as part of the dialogue. I am impressed by the scientists and medics who ex- plain the situation to us. They are trying to give us the information which explains why they are com- ing to decisions that they are. As we approach a further exten- sion, we need to be given the facts behind that decision. Those facts may demonstrate that we got things wrong in the recent past – so be it. The examination of the history of our actions can wait. What mat- ters is that we are given the facts as understood now, and the actions we need to take on that basis for the next few weeks, This is trust. I accept that experts are doing their best to understand a complex situation and are applying that knowledge to come to the best decision that they can make. I do trust our scientists; but I do not ask – or expect – them to be perfect. For many, the current stock market “Corona-crisis” will have had a significant impact on their investing confidence and on their future plans. Concern is a reasonable reaction. We have witnessed the sharpest ever bear market, worse than the Global Financial Crisis or 1987’s ‘Black Monday’. Whilst confidence has been dented across age ranges, it is appropriate to remind those under 40 that there will be time to recover. This may be the first significant downturn in your investing life, the period after 2008 has been unusually low in volatility, however, investment markets will continue to deliver longer-term returns. For those of a more “mature vintage”, this downturn could not have come at a worse time. If you are already retired and drawing from investments, what is your best strategy? Should you move to cash until the economy returns to normal? Should you take more risk and wait for an eventual recovery? What should you do? The smart advice is to not sell at or near the bottom of the market. This simply crystallises your losses, which until then have only been on ‘paper’. But how do you recognise the bottom when it arrives? This is only clear in hindsight and the current situation is far from Lubbock Fine Paternoster House 65 St Paul’s Churchyard London EC4M 8AB t +44(0)20 7490 7766 predictable. For the first time in history the entire global economy has been halted. The statistics are not consistent, but around 50% of the world’s population are currently in lockdown. What you need now is a clear head. There will be investment opportunities but there will also be significant casualties. The future could look very different. While we will be more comfortable shopping online; have the confidence to use technology to facilitate virtual interactions and maybe even travel more mindfully when we can, if you are approaching retirement age, you may want to postpone your plans for 2 or 3 years and allow your assets to recover, while perhaps investing more. It may be appropriate to take on more risk. It may be appropriate to amend your targets and consider whether or not they were realistic in the first place. There may be other options to help achieve your goals. Financial advisers have many tools at their disposal, like cashflow modelling and investment analysis software. They also have experience with similar situations that enable them to help you formulate the right strategy for your specific needs. In conclusion: don’t despair, keep a cool head and employ a financial adviser to set you on the right path to the future you always dreamed of! Ie facts n the next few hours, the gov- ernment will almost certainly decide to extend the lock-    

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