Don't Panic!


14 October, 2008

Everything we hear or read at the moment that is remotely financial is all doom and gloom.

Economies, house prices and stock markets have always been cyclical. No one knows when a correction will take place or how long a growth cycle will last.

In the current crisis sub-prime mortgage issues, inflation, high oil prices and the lack of available borrowing at reasonable rates have all come together at the same time.

The press and media are full of Bad News stories. The FTSE 100 index recently went up almost 10% in a day yet it was not even headline news.

We are emotionally drawn to bad news. The more often we check our investments and watch programmes that sensationalise the issues of the moment the more our feelings are likely to turn to panic.

But what can be done? As Corporal Jones used to say "Don't Panic". We need to sit down and review our own situation. We need to ask ourselves is there more risk today than there was last year or five years ago?

Here are some important things to do:

  • Check life insurance, critical illness and income protection cover. It is all too easy to neglect these items when all things financial are receiving a bad press.
  • Ensure that you have maximised all your ISA allowances.
  • Check that you have enough Cash and Deposit based investments to cover emergencies over the next five years. These need to be sufficiently diversified between different banks and building societies.
  • Remember to save, even if only little and often, into your pension arrangement.
  • Review all loans and mortgages to ensure that they are manageable and that the interest you are paying is kept to a minimum.
  • Regularly review your Investment Portfolio. Ensure diversification and remember that not all investments are short term.

It is important that people do not become so overwhelmed by bad press that they do nothing with their finances. Seeking independent financial advice is now more important than ever to take account of changing circumstances.


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