If your portfolio was your house

Dominic Thomas
April 2025 • 2 min read
If your portfolio was your house…
As you come across news stories about sudden market falls, (I doubt you have read one about a sudden market increase, unless it’s designed to prompt feelings of envy), I wonder if thinking of them is better if you consider it in the context of your home.
“HOUSE PRICES AT LOWEST POINT IN 5 YEARS”
If you read the headline above, you may be a bit miffed, but you are unlikely to change your plans. You almost certainly don’t ‘panic sell’ your home worried that the value may fall further. Panic selling a property is also generally pretty difficult, even with the most attentive broker, conveyancer, lender and buyer, it’s unlikely that the process will complete within three months, certainly not the next day. This process, whilst decidedly unhelpful to people buying and selling, does help reduce the impact of panic.
If there is a property crash, generally you sit it out, waiting for things to improve. A few people may be caught out, those in the middle of a sale or who have to move for various reasons – it is these people who are most likely to suffer the pain of a downturn.
Similarly, your portfolio is set up to provide a lifetime of income and capital. It is anticipated that the value will vary each day. Unlike your home, share prices are based on corporate results, track records and expectations for their trade in the near future. Your home is valued based on similar properties in the area; what you think it’s worth and what someone else is prepared to pay are often very different.
In short, your financial plan is designed for you, stretching out over the years to come. Yes; we don’t know how bad things will be in the short term, or indeed how quick or how full the eventual recovery will be, but it will happen.