Keep Calm and Carry on my old China
Posted by siteadmin on Friday 28th August 2015.
Over the weekend I received a call and an email from two separate clients with one thing on their minds. China.
The concerns about the wider Chinese economy along with the reduction in their prospects for growth spooked the financial markets and these clients wanted to know what we should do.
The simple answer is nothing. ‘Nothing,’ I hear you cry? Yes that’s right.
Both individuals wanted reassurance that what was happening thousands of miles away wouldn't affect their lifestyles closer to home.
The markets are reactive but the general consensus is that the westernised economies are stronger and better capitalised than they were back in 2008.
What's important to remember here though is that good solid financial planning is proactive. I’ve spoken about this several times but it’s worth repeating.
Simply, we can’t control certain things that happen but we can plan and take precautions to be better protected against them.
I’ve experienced a lot during my twenty five plus years in the financial world. Unexpected events beyond our control have happened several times during that period.
In 1992 we had the ERM crisis which saw interest rates rocket skywards within a twenty four hour period. In 1995, Barings Bank collapsed caused by the actions of an infamous Rogue Trader. In 2001 the 9/11 terrorist attacks rocked the World and changed it forever. And in 2008 the Lehman Brothers crash had global repercussions resulting in the credit crunch and a deep recession.
Now in 2015 it's China's turn where seemingly the World’s powerhouse and safe bet for growth has had a major wobble causing stock market sell offs and concern all over the globe including here in North West London.
Reminiscing Corporal Jones from the BBC's sitcom Dad's Army, the one consistent is the necessity of 'don't panic Mr Mainwaring'.
Doing the ground work of planning, monitoring, reviewing and having back up plans means that our clients can relax. From time to time there may be actions we might need to take, but storms tend to blow through and eventually fizzle out.
Likewise and as I've said before, the media only report on events that are dramatic and the markets tend to drop suddenly as and when issues occur and then recover more conservatively.
All of the above is part of the financial cycle, which I talk about in my soon to be released E-Guide, The Five Fundamental Steps of Solid Financial Planning.
The guide is free and well worth a read.
PS For those of you unaware of Cockney rhyming slang, ‘China plate’ means mate.