Market turbulence

If you have followed the news, you will appreciate that global stock markets have been falling sharply over recent weeks. This is in response to the wave of changes and abandonment of normal policy by the new, rather insane US Government.

Your portfolio will have fallen. It will recover, the question is really how much worse will things get and how long before they recover. To which the answer is, “I don’t know” and nobody knows.

I would remind you that we have seen significant falls in market values every year (on average -15% every year at some point), it’s simply that some years you and the media pay more attention.

You can view your portfolio in our secure portal or on the platform portal that we are using for you, typically Fundment, Nucleus, Parmenion or Transact.  However I would caution against doing so regularly as this will merely increase your anxiety, which isn’t good for your health or your financial plan.

Many of us realised that Trump was not someone to be trusted, based on his actions over many years, but despite his very odd decades-long special relationship with Putin, it seems that there are still swathes of Americans who are unable to discern this (even if it smacked them around the face with a kipper). Denial and distortion of facts and reality are in evident supply, unlike truth and justice.

In terms of helpful and reassuring information and our approach to evidence-based investing, JP Morgan produce data about the worst declines in valuation during each calendar year.  Admittedly, this is the FTSE All-Share not the global market, but the principles are exactly the same. It’s a chart that you would have seen before in our client magazine Spotlight.

The chart shows the grey bars as the final return for the calendar year since 1986. It shows that of the 39 completed years, 27 (70%) were positive, 12 (30%) were negative. That means that roughly one year in four is negative. The red dots indicate the worst or deepest decline in each of those years. Every year has a ‘crash’. The average drop is 15% and the median (the middle value when all lined up in order) drop is 12%.

This knowledge hopefully provides some comfort about the reality of ‘drops’ each year, but the message is really – don’t panic, stay in your seat. Admittedly you could say “sell it, get me out” but this will actually realise a loss (make it real rather than notional) and it is unlikely that you will re-invest at a point that is any more favourable, if you do that’s probably luck rather than skill.

We have built your financial plan making allowance for these scenarios. Investments do not grow in straight neat lines; they are erratic.  The greater the proportion you hold in equities (shares), the more volatile, but also the greater the reward over time. Your plan is designed for your entire lifetime and beyond.

As of now (March 17^th 2025), the global equity market is down -3.75% since the start of 2025. Global Bonds are up +0.85% and a 50/50 portfolio is down -1.73%. The numbers in pounds will look considerably worse than this, they always do because you relate to pounds in terms of your income and spending rather than your capital, but it is healthier to consider it in percentage terms. The chart below shows the Year to Date (YTD) figures for Timeline Tracker 100 (green) 50 (yellow) 0 (red).

Looking at a longer term perspective helps provide some context.

None of us like to see portfolios hit heavily, it is unnerving. As I have said, this is currently down to the politics of the US Government, with proposed tariffs and appointing billionaires to act as parodies of Bond villains providing ‘advice’ to the White House. Personally, I hope that he is removed from office as soon as possible, but it is also clear that the Vice President is perhaps even worse, possessing very little understanding of how the world works.

Generally in life we tend to assume that wisdom is correlated with age. At the age of 78 I find no evidence that Trump possesses any. Mr Vance at age 40 certainly hasn’t acquired any yet.