It is one of life’s great anomalies. The press and other commentators like nothing more than scaring ordinary people with big headlines around “markets crash” and “£X billions wiped off the FTSE”, yet when the reverse has happened there is just silence. Nothing. Quiet.

Well, I for one am not going to let that happen. I am going to stand up and scream from the rooftops.

Those of you (and its virtually all of you being my clients) who stayed the course, who trusted the market and were able to set aside your own financial fears, you are in a much better place than you were two weeks ago. Whilst clearly markets are nowhere near back to where they were in January, most markets are 10% above the bottom (for now) of around March 23rd.

Of course nobody can be sure this was the bottom and risk always remains in the market, as well as in life.

With the Prime Minister in intensive care, that really does bring home how devastating this virus can be.

However, there is always risk. There is risk in everything we do, but our modern world seems to think it can manage away all the risk and leave us with a false sense of ‘certainty’. Well if the last two months have taught us anything, it is how ridiculous this concept of certainty is.

What is risk and how do we handle it?

When you ask most people about risks with investing, their answer will be something like “I don’t want to lose all my money” or “I limit cash savings in the bank to £85,000 to keep below the limit in case the bank goes bust”. These answers are all very understable, but also statistically as likely as you winning the Euromillions jackpot.

Interestingly people do not answer “I’m worried that inflation will totally destroy the value of my savings over the next 20 years” or “I’m worried I don’t have enough exposure to shares for my long-term investments”.

Both of those latter answers are statistically far more likely to impact most people in terms of their long-term wealth and retirement planning. And by an enormous factor. But it doesn’t ‘feel’ that way because of market falls and bankruptcies receiving far more coverage than the other news.

I do a lot of work with clients and helping them understand their true risk tolerance and review what the biggest and most likely risks are that they face. We do everything we can to mitigate those risks.

The biggest financial risks you really face

Health – There has not been a time in recent history where people are more aware of their health and mortality. Are you worried about this? Insurance can cover the financial implications of this. Yes it costs, but what is your priority in terms of your spending?

Inflation – With the enormous liquidity being pumped into the system, we are more likely to see inflation over the next few years than at any other time over the last 40 years. Are you ready for this? We can mitigate this.

Making mistakes – As highlighted above, the media will try and shake you from your long-term plan consistently. Scare story here, world is ending over there. There is huge temptation to move to cash in times like this and ‘just wait things out’. However unless you have a crystal ball on your timing, you are highly unlikely.

Adam