It’s been quite a ride in stockmarkets during 2008 and 2009!
After coming into 2009 following a slight recovery in late 2008, we dropped again until March 2009 and reached a low point on the FTSE 100 of just 3,512 (a 25% drop in the first few months of the year).
It’s hard to remember what it was like then, but news was full of bad news and it seemed like the economy would never recover. (It might still feel like that for Alistair Darling!).
But since those “dark days”, things in investments have got better and better. It’s been a great summer and autumn for investing! As we come into December, the FTSE 100 now stands at 5,312 – a 51% increase from the low point in March!
So is it too late to invest now?
In reality, since the start of 2009, the growth is actually 16%, which is not an excessive growth rate. And it might be right to discount the big drop to March 2009 as much of it reflected the final throws of the issues from the credit crunch, not real issues with companies (which should be what the market numbers tell us!).
And actually, the recovery in the UK economy has only just got going – and will probably rise throughout 2010 and into 2011 (no-one wants to predict what will happen beyond there!). If we believe that the economy will keep getting better, then it is right to believe that their profits will keep rising and therefore the value of their share prices will keep going up. A recovering economy is good for rising markets.
And let’s not forget that keeping money in the bank is not doing anyone any favours – and interest rates are probably not going to start rising until towards the end of next year at the earliest.
Nervous investors can feel safe coming back to the market even now – especially, of course, if they are taking advice from advisers who they know and they trust!
Any questions, we’re always happy to help.
So is it too late to invest now? Absolutely not!
