Lifeboat Drills

I have never been on a cruise but am reliably informed that the lifeboat drills happen at the beginning (often before the boat leaves harbour). Naturally these are done so that if a disaster happens the guests know what to do.

In investing we also use lifeboat drills to remind investors of the volatility we can see at times in investment markets.

There is a key difference between a cruise ship lifeboat drill and an investment lifeboat drill however. In the first instance it is pretty unlikely the drills will ever be needed but in investments they are almost guaranteed to be needed.

For example, you may have heard of “bull” and “bear” markets, the former when markets are rising, the latter when they are falling ( you grin and “bear” it).

Ask yourself this question… How many times have we seen the UK Stock market (FTSE All Share Index) fall by more than 10% since 1956?

I often ask this question with the answers generally ranging from two to eight.

The answer is in fact 16 or an average every 3.75 years*

We can conclude from this that markets correcting (not crashing, something that crashes rarely recovers) is very common and to be expected.

Does this make it enjoyable when it happens, absolutely not but knowing it is very common is a way to ignore the noise/media hype and accept it is a normal part of investing and by not reacting we harvest the above inflations returns we invest for.

Have a great weekend


*Source : EBI Turnkey Workbook March 2017

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Coronavirus (COVID-19)


Blackdown Financial update – 11th May 2020

Based on ongoing government advice, we at Blackdown Financial continue to work remotely for the present.

We continue to offer all clients a full and seamless financial and mortgage service.

Video conferencing has replaced all face to face meetings, which has proven to be a successful and safe alternative means of communication.

We welcome all new enquiries on a free of charge no obligation initial meeting.

Please feel free to contact us on our main number 01823 321616 or email to discuss your financial or mortgage needs.