17-04-2025
As stock markets swing, remember: it pays to stay calm
One of my favourite Christmas presents last year was a small, framed picture of three words: It'll Be Fine. It was an in-joke: apparently, it is what I say.
I suppose I do believe that most things are neither as bad as we fear nor as good as we hope. We muddle through and, most of the time, having been fortunate enough to have been born in Britain in the second half of the 20th century, it really has worked out well.
This is certainly how I have learned to view my investments.
I was not always so sanguine. Ironically, when I had less to lose, I worried more. Over time, I have realised that investing really is the Triumph of the Optimists, as a study of a hundred years of stock market performance described it a while ago. Or as the subtitle to Stanley Kubrick's 1964 black comedy Dr Strangelove put it: 'How I stopped worrying and learned to love the bomb.'
The bomb, for investors, is a bear market – the sustained decline in the value of our investments that I have learned to, if not exactly love, then at least embrace.
Just as well, you might say, because in recent years the bear has been a frequent visitor. We have experienced 20pc-plus declines in the value of shares four times in the past seven years. That is more than you might expect on the basis of the 30 bear markets in 190 years identified recently by Goldman Sachs.
