A long-term view helps our IFAs to recover some lost ground

Published on Friday 15 August 2008 20:23

LAST month we revealed the fortunes of our IFA of the Year contenders at the halfway stage. It didn't make for easy reading, with every portfolio value below the starting point of £300,000 and reflecting the stock market woes of the last three months in particular.

The five featured this month are not yet back in black, but the good news is that they've all recovered significant ground since the July update.

David Rankin and John Moore are both up almost 4 per cent over the last month and the other three have risen by nearly as much.

What is significant is that in each case they've resisted the temptation to make changes to the portfolio, a policy that many investors would do well to adopt.

Aside from a timely oil price weakening, the news headlines have offered little succour to investors in the last month and that alone is enough to spark decisions that don't reflect long-term goals. Research from Edward Jones shows that historically, markets rise for longer than they fall.

Since 1968, it said, the FTSE All Share has suffered 12 declines of 10 per cent or more, with an average fall of 23 per cent over an average time period of eight months.

Based on that, the FTSE All Share may have reached its low point in March. Of course this is just the FTSE All Share, but there is hope for investors, particularly as stock markets tend to bounce back before the economy.

While we presumably have some way to go before any glimpse of bull market territory, keeping an eye on the long term is essential, as our IFAs have demonstrated in recent weeks.