Why now, why 7IM?
Markets can be stressful, especially in uncertain times. But our long-term approach to investing helps to keep the emotions in check.
When markets are volatile, it’s tempting to feel you need to do something. Quickly. But at 7IM, we believe that emotional responses can damage wealth. Instead of dashing to respond to every up and down in the market, we rely on experience, discipline and a long-term approach to investing.
Why diversification and patience are key
Whatever anyone might tell you, no one has perfect foresight and no one knows what will happen next – as 2020 and the Covid-19 pandemic proved. This applies to investment too.
Therefore, we believe that one of the keys to managing money is a well-diversified portfolio. This means holding a range of assets with different drivers: if one asset falters, other assets may help to mitigate that.
Another of our principles is to think long term. After a crash, there’s an understandable reaction among investors to take refuge somewhere quieter or apparently safer. Cash may seem like the answer.
But it’s not as simple as that because there are still huge questions to answer. When to sell? When to buy back? How to avoid further falls? How to avoid missing out on recovery?
An approach that has worked
Timing the market is hard and irrational decisions can have long-term consequences. That’s why we avoid this type of response and stick to investment principles that have served us extremely well over the years – including during the Covid-19 pandemic.