Back down to earth like meteorites

Markets go down and up! Dr Benjamin Holdsworth looks at the lessons to be learned from the last year.

As an investor, one is always learning. Our perception of investing is guided by our experience.

Those old enough to have been investing in the 1970s will retain uncomfortable memories of rampant inflation and the impact that had on cash, bonds and the general travails of life when prices spiral upwards. 

Others who lived through the birth of the internet and the boom and subsequent bust of the ‘ era’ of the late 1990s and early 2000s, may also be living through a sense of déjà vu. 

For most investors, interest rates have been on a steady long-term decline, making mortgages cheaper and supporting bond and equity prices. In the past 12 months, we have been reminded of some useful lessons that can – hopefully – make us all better investors. 

Several key lessons stand out: