A third quarter investment lesson
If you had been asked at the start of 2016 what would happen to UK shares in the July-September quarter if the Referendum vote had favoured Brexit, the chances are you wouldn’t have predicted a 6% rise. And that almost certainly wouldn’t have been your response if you had been asked the same question at the start of the third quarter – just a week after the vote.
But the fact is that the FTSE 100 achieved a rise of 6.1% over the three-month period, leaving the index 10.5% higher than when the year began. It is a reminder that trying to second guess what the stock market will do over a relatively short timescale is extremely difficult. It can also be costly, as those investors who rushed for the exits after 23 June now realise.
The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investing in shares should be regarded as a long-term investment and should fit in with your overall attitude to risk and financial circumstances.