Watch / Listen
  • Not Sure What To Do On Investment Alert

Traffic Light Investment AlertsInvestment Alerts and Active Fund Switching

What to do when you receive an investment alert from us.

This article has been prompted by discussions over time with a number of clients about what actions you should take when you receive a red, amber or green investment alert.

Clients are not always sure what to do.

They are not sure whether the alert affects them. Hence this article.

Traffic light investment alerts explained: What action you may wish to take.

The mechanics of investment alerts:

We are not investment geniuses

We cannot call the market: if we could “call” the markets then you know we would be a multi billionaires

If we could, we would be lying on our yacht sunning ourselves at the moment

Nobody can call the market.

Nobody can decide exactly when the right time to invest is and when the right time to come out of the market is.

What we do is we look at various markets whether it's the American market, the UK stock market or the Far East or Europe.

We make judgement calls on whether we believe the markets are high or are they low or are they good value and we then make decisions on whether we are personally investing our own private money. 

We then issue an investment alert based upon that weekly decision.

This does not constitute personal investment advice to you as this is us sharing what we decided to do with our own investments and pensions.

Our simple principle is: “buy low, sell high” and that's how we make money.

Think of this just like when you bought your property:

If you bought your property when prices were low and it's gone up then you have growth

If you bought your property in 2007 and then there was the property credit crunch point and your house price may be lower than what was i.e. you bought at the wrong time.

This is a simple methodology: buy low, sell high.

This is exactly the same for stock market investments and bond investments: buy low, sell high.

If we issue a green alert for the US stock market, the UK stock market or the Japanese stock market, then this ‘green alert’ is us stating we think markets are low or represent good value we are putting some of our money into those markets.

If we issue a red alert red alert, then we believe the markets have grown and quite high and maybe, that's the time to get out of that market and take our profits.

When we took at taking profit we are not talking about the money going into your bank account.  What we would do with most pension and investment funds is make a switch inside your policy to other funds.  Usually inside most pension and investment policies there are a range of high-risk funds, medium risk funds and low-risk funds.

As an example, you may wish to lock in profits by switching from a stock market fund to a cash fund.  Literally move it internally from one to the other and in most cases there aren't any charges to do so.  As ever, you will need to check the small-print for any charges.  It is usually relatively simple, literally either online, by telephone or or do it by pape

If we issue a red alert for Japan, how do you know whether that affects you?  You can only know if you actually know what funds you are invested in.  You can check this by giving us a call or your investment company a call.  If you are a client, you may wish to simply respond to the email alert saying you not sure whether you are in Japanese funds.

By not taking action, you risk missing out on growth or losing out by not locking in profits before a fall so don't leave it if you want to follow our lead and take the same investment action as we are doing with our own personal funds then don't ignore the alert, reply to it. Don't worry about it because you may be able to get higher growth if a more proactive approach is taken.  It is just like servicing you care, if you do not do it, it will break down eventually.

With our investment alerts, we may not get it right every single time but certainly what we are doing is we’re trying to grow our own pension funds and our own investments, so maybe this service is something that you can take advantage of as our professional eyes are watching markets daily. 

Contact Us - Never Worry

In closing, all we would we would say is: “Do not worry. If you're not sure whether an investment alert affects you or not just contact us”.

If we have moved to a positive or negative outlook for any given market such as Japan or North America and we have switched in or out of that market and issued an alert, then we suggest you consider responding to that alert and contact us with a “yes, please switch me”.  An explanation and instructions are always offered in the investment alert email.  

Take action, don't ignore investment opportunities. 

The following is an example of the results of not taking action:

  • If you look at the UK FTSE 100 index for 2014 and compare what it opened with in January 2014 and what it closed at in December 2014, over that whole year the FTSE 100 index fell by about 3%.  If you would actively switched from cash fund to the equity fund to cash fund and back again at different points, along the lines of what we've suggested in our alerts, you could have made upwards of 20%- 30% (and that was in a market that didn't grow over the whole year).  Looking further afield, we made 45%-50% on our China investment funds alone that year.

Being proactive pays off.

Search Financial Advice
Financial Advice Dictionary
Page Options