Market fall is like January sales time for smarter savers

David Hill INLT 45-099-PSB
David Hill INLT 45-099-PSB

We know that shares can fall as well as rise, but the stock market has had a particularly volatile 2015 (writes David Hill).

The FTSE 100 started the year at 6547 and by April it had risen to 7103. The six-monthly investment statements that issued every April and October looked very impressive in April, but by October the FTSE had fallen to 6053, a drop of nearly 15 per cent in just six months. This week, the FTSE fell below 6000 points.

Anyone wanting to take money out of their investments now may be disappointed, but anyone who is saving regularly into their investment each month should be delighted that they are able to buy 15 per cent more shares with their money now than they could have back in April.

This is where savers often make a mistake by stopping or reducing their savings when the market is low. Smart savers, where possible, increase their savings at times when markets have fallen, taking advantage of the cheaper prices. It is a bit like buying in the January sales, yet every time there is a market fall, I hear people saying: “I will wait until things improve before saving any more”.

In an ideal world for those saving regularly into ISAs or pensions, markets would remain low for many years and increase just before the money is needed to be spent.

David Hill is a Chartered Financial Planner and Trust & Estate practitioner at Hills Financial Planning, 15 Agnew Street, Larne. He can be contacted on 028 28276814 or by email: david@hillsfinancialplanning.co.uk