Thirty Years On: Weathering the storms

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October 1987 is ingrained in the nation’s psyche for two reasons. Most amusingly – although for many it was anything but funny – is that it was the time BBC weatherman Michael Fish confidently reassured an enquiring viewer that her sister’s hearsay that a storm was on the way was erroneous. Mr Fish has now had to live with 30 years of ribbing that his reassurance was rubbish because a storm was indeed on the way. And it wasn’t just any storm; it’s gone down in recent annals as “The Great Storm”. Oh, well, Michael, if you’re going to get it wrong, get it wrong big time.

The second national treasure from 1987 also related to a storm – a financial storm. On Monday 19 October that year, stock markets around the world crashed. The day became known as Black Monday. As a young twenty-something, it was a poignant time. That’s because it was that week I joined the world of working in financial services. Stock markets, unit trusts, Personal Equity plans and to an extent, pensions, were all unfamiliar concepts to me. But I do remember vividly the impact the events of Black Monday had on the company I worked with then as investors, quite understandably, worried about their pension and unit trust values.

I’ve since lived through another three major stock market crashes. The first of these was in 1999 when the dotcom bubble burst. This was the first crash I’d experienced as an investor myself and for me, like many others, it was an anxious time.

There were other crashes in 2003 and 2008 but having lived through one I was more relaxed. That’s because the lesson I’ve learned from all the crashes is that as I’m invested for the long term, I’m able to ride out the ups and downs of the stock market, particularly when it comes to investing a regular amount rather than trying to guess the best time to invest a lump sum.

Investing in stocks and shares through pensions and unit trust and OEIC ISAs means your investments benefit from the addition of dividends and it is these that drive stock market gains. Of course dividends are not guaranteed and as this article has highlighted only too well, the value of investments can go down as well as up and your original investment is not guaranteed.

So, happy 30th Anniversary Black Monday. It was a time of stormy weather in more ways than one but in terms of the financial storm and the ones that followed I’ve learned to keep calm and carry on investing!

No advice has been provided by Scottish Friendly. If you are in any doubt as to whether a savings or investment plan is suitable for you, you should contact a financial adviser for advice. If you do not have a financial adviser, you can get details of local financial advisers by visiting Advisers may charge for providing such advice and should confirm any cost beforehand.