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By: Simon Danaher

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August 24th, 2015

3 funds you should buy today, and proof that buying now makes sense

Investment

Why you should invest even if things are bad

Today is the type of day professional investors wait months or even years for – a market correction, a dip, a crash – call it what you like, we see it as an opportunity, and you should too.

China market crashMarkets around the world are in turmoil, largely caused by an economic slump in China. Billions have been wiped off the value of shares from Hong Kong to New York, with the Shanghai stock market clocking its biggest one day loss since 2007. The press has already nicknamed today “Black Monday”.

However, we think it’s anything but “Black Monday”, and we are going to reveal why this could actually be the best opportunity to invest for years.               

If things are this bad, then why should I invest?

You may be wondering why, if financial markets are looking such a mess, we would recommend anything other than steering clear. It’s a good question, and caution is never a bad thing when considering an investment.

To answer this question we have looked back over historical data, which shows why investing at times like these makes sense.

We are also going to reveal our three fund recommendations picked by our team of expert fund analysts.

What happened the last time around (and the time before that…)?

The first thing we must point out is that global markets have been riding high for some time – both the S&P 500 and the FTSE 100 hit record highs this year and so, whatever happens in the next few days, there is potentially further to go. In plain English – if you invest now, your investments may fall a little further before they go up. But don’t worry!

Data shows times like these are great times to invest.

Here are a few examples of how you can make a stock market crash work for you.

In mid-March 2003 stock markets in the UK and US hit lows after a sustained decline. This particular “crash” has been linked to the burst of the dot com bubble a few years earlier – regardless of its cause, those markets reached their lowest points in mid-March 2003.

Rather than take that as our data point though, we’re going to take a few months earlier – December 1 2002. This is more realistic, as we only know the market bottom in retrospect.

A £1000 investment in the S&P 500 on 1 December 2002 would today be worth £2504 – a 150% increase in value. If you had timed the bottom, which was somewhere around 12th March 2003, the same investment would be worth £2906 – a 190% increase.

Here’s another example. The FTSE 100 reached its lowest point on around 5th March 2009, following the Global Financial Crisis. Again, rather than taking that as our data point – let’s factor a little of the fall in. An investment on 1 December 2008 of £1000 would today be worth £1958 – a 95% increase.

Note that in these examples we are just talking about tracking an index  not attempting anything more clever than literally following the progress of the index over time.

How can I take advantage of today's opportunity?

Our team of investment experts, who make up our Centralised Investment Team, have selected three funds which they recommend you buy today. All of these funds can be accessed through our offshore investment account.

Our expert fund picks are:

Fundsmith Global Equity – This fund has a defensive strategy, meaning it has bought into companies which are less linked to the larger economic cycle – companies which tend to do well when the economy sours.

AES International head of investment strategies, Ashley Owen, says: “This fund’s defensive strategy, coupled with a long term buy and hold strategy, akin to a Warren Buffett approach, makes this an ideal choice.”

iShares MSCI World – This is an exchange traded fund which covers 1,642 stocks from developed markets over 23 countries.

AES expert Ashley Owen says: “This ETF represents a cheap way to gain exposure to a diversified portfolio of equities and will track the upwards progress of markets as and when they recover.”

Legg Mason US Aggressive Growth – An active strategy within the US.

AES expert Ashley Owen says: “This fund has seen a sharp correction over the last month making this an opportune entry point to a portfolio of high quality companies.”

Don’t be scared by the noise and miss this significant investment opportunity. Sign up to our offshore investment account and begin investing today.

Open your account now »

About Simon Danaher

Simon Danaher previously worked for AES International, in marketing and communications.