US trade tariffs and what it means for your money
What's happening and why?
In response to recent US trade tariff announcements, investment markets have entered a period of volatility as global economies assess their potential impacts on various economic sectors. This situation has worldwide reach, which is why most of us are finding our investments are being impacted right now.
Take a breath - you’ve probably been here before
It's understandable to feel concerned when you see fluctuations in the value of your savings. In the short term, the outcomes and duration of this situation remain uncertain. However, it’s worth remembering that market fluctuations are a common feature of investing. Think back over recent years: investment markets dipped at the start of the global pandemic but eventually recovered. They have also responded to wars by initially falling but then rebounding. Markets have consistently recovered from similar crises in the past.
Although the future is unpredictable, and past performance is not indicative of future results, ups and downs are a normal part of investing.
What should you do?
It's important to remember that investing is a long-term thing, so looking at it with a short-term lens can lead to decisions that might harm your long-term financial goals. If you've been investing over recent years, chances are you've already weathered other periods of market volatility (like the ones mentioned above).
Remind yourself why you began saving in the first place and avoid making decisions without considering their long-term implications. In unsettling times, you might feel tempted to switch or sell your investments to cut your losses. However, remember that for every seller, there's a buyer. By selling, you're offering your investments at a knock-down price for someone else.
How is NatWest Cushon managing your investments?
We spoke to our Chief Investment Officer, Veronica Humble, for her insights:
Within Pensions, some members prefer choosing what they invest in themselves – but most invest in our default investment strategies. This could be Cushon Sustainable Investment Strategy or Cushon Core.
Both have been designed with a long-term view and younger members invested in equity heavy strategies are some time from their target retirement date. This means members can afford to sit tight until markets recover. As we saw in 2020, when markets fell by up to 20% due to the pandemic, they then bounced back the following quarter. Equity market falls are something we have weathered many times in the past and we will continue to see them in the future. But when members are furthest away from retirement, the aim is to build up their pension pots as best as possible and equity markets have continued to deliver strong performance over the long term.
Older investors who are nearer to taking their pension have been better protected, because of diversification. Because these members are closer to retirement, we’re managing risk so not all your eggs are in one basket.
Be assured that we regularly monitor our solutions to ensure they continue to meet the needs of our members today but also in the future.
Our aim is to help you with your retirement goals by providing solutions that can deliver long-term value.
What if you've started a transfer or changed your investments?
If you’ve recently started a transfer or have changed the way your money is invested, the value of your investment may be lower due to market fluctuations and timing. Volatile markets can cause the value of investments to rise and fall rapidly, so if your investments had fallen in value at the point of transfer or investment switch, the cash value may have decreased.
What if you're planning to access your money soon?
If you’re planning to access your money soon, consider resources like MoneyHelper or consult a financial adviser to make informed decisions.
You can access MoneyHelper, a free government service providing general guidance about investments and pensions, by visiting www.moneyhelper.org.uk or calling 0800 011 3797.
If you are 50 or over, you can book a free and impartial Pension Wise appointment, offering 45-60 minutes of specialist pension guidance to help you understand your options. This can be online, by phone, or face-to-face locally.
Contact number: 0800 011 3797
Website: MoneyHelper
Alternatively, you can seek advice from a financial adviser, though a fee may be required. To find a local adviser, visit MoneyHelper.
Article by
NatWest Cushon
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