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What 2020 can Teach us about the Value of Advice

By March 12, 2021December 3rd, 2021No Comments
management team and the secretary are meeting

When the clock ticked over to January 1st, we were all happy to see the end of what was a very trying year.  We were all a bit more wide-eyed and optimistic for the year ahead.  The year past was bookended by the worst bushfires in Australia in recent memory and the hope pinned on a vaccine for a virus that had crippled the world. 

The uncertainty in the world and locally caused our financial markets to react.  Investors like things to be predictable, yet 2020 was anything but. 

The 2020 market was a unique beast – or was it?

Financial markets are volatile in their nature – Intraday ups and downs are common.  Market corrections like we saw during March/April 2020, while not as common, do occur.  In recent memory there has been: The GFC, the Tech Bubble and the US terrorist attacks – all events unpredictable and all events causing angst in the world financial markets.

Taking a short term view, the markets were very volatile during these times. But with the large correction came the recovery, clawing back a majority of the market’s losses. 

The Value of Advice

A very critical part of the Financial Advice process is education. Your strategy is formulated specifically for your goals, but just as important is the “Why?” Understanding the reasoning behind your Financial Plan gives you more peace of mind. 

During the advice process a Financial Adviser would assess your financial situation, your mentality and your investment experience to construct a portfolio you were comfortable with.  The Adviser will take the time to make sure you understand that, although uncomfortable, the ups and downs of the market are normal.  We have previously discussed this in our article: “Is Time on Your Side?”

ASX Australian Investor Study 2020

The ASX performed a study1 during 2020 to gauge investor’s responses to the market. 

An interesting take from the study was how investors who had Financial Advisers felt:

“Asked how helpful their financial adviser has been in managing the impact of COVID-19, 84% of advised investors say they have been helpful, with 41% saying they were “extremely” or “very” helpful”

Moreover for those without Financial Advisers:

  “17% of non-advised investors saying they are more likely to consult a financial adviser in future.”

Yes, the correction would have made you anxious as it did everyone. However, by understanding their long term strategy, goals and objectives, those who had sought advice better understood the long term trends of investment markets. 

If you would like to discuss your investment portfolio with us or discuss anything else about your Financial Plan – Schedule a no-obligation Discovery Chat with us.

Discovery Wealth – Trusted Financial Adviser in Baulkham Hills and the Hills Area. 

  1. ASX Australian Investor Study 2020 (available online)

The views expressed in this publication are solely those of the author; they are not reflective or indicative of RI Advice Group’s position and are not to be attributed to RI Advice Group. They cannot be reproduced in any form without the express written consent of the author. Louella Jorge is an Authorised Representative of RI Advice Group Pty Ltd, ABN 23 001 774 125 AFSL 238429. This editorial does not consider your personal circumstances and is general advice only. It has been prepared without taking into account any of your individual objectives, financial solutions or needs. Before acting on this information, you should consider its appropriateness, having regard to your own objectives, financial situation and needs. You should read the relevant Product Disclosure Statements and seek personal advice from a qualified financial adviser before you act.  

Discovery Wealth Advisers

Author Discovery Wealth Advisers

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