No need to panic – this is a fire drill, not a fire
We are all aware of the Great Fire of London, and detailing an event that took place 346 years ago seems a bit of an easy option. However, just over 200 years ago saw what you could refer to as 'The Great Fire of Moscow'.
The fire broke out on September 14, 1812, on the day when Russian troops and most residents abandoned the city as Napoleon's vanguard troops entered it, following the Battle of Borodino. The fire raged until September 18, destroying an estimated three-quarters of Moscow.
Before leaving Moscow, Count Rostopchin gave orders to have the Kremlin and major public buildings (including churches and monasteries) either blown up or set on fire. But this was not the foremost cause of the conflagration that destroyed the city. As the bulk of the French army moved into the city, there were some fires. Their cause has never been determined and both neglect as well as Rostopchin's orders may be among possible reasons. Today, the majority of historians blame the initial fires on Russian sabotage.
Fire drills are unlikely to have been implemented prior to the 1812 fire, but they are of course a good thing – the fire might never actually occur but, if the worst happens, at least you can be confident you have taken all the appropriate precautions.
When considering investments, a similar principle applies – the real trick is to make sure you plan your portfolio properly at the outset.
When the economy slows down, it is inevitable share prices will take a hit. Such times (such as the last five years!) are never comfortable, but there should be no need for investors to panic. Instead, they can offer a continued opportunity to review your portfolio and ensure that it is positioned to weather any further storms that might lie ahead.
This does not mean that you necessarily need to make sweeping changes – after all, weatherproofing your house against the winter does not mean you tear it down and rebuild it. Instead, you make sensible, incremental changes that provide additional strength.
With that in mind, I have produced a simple ten-point guide to help you help you fight off the worst effects of difficult times for investments, and a copy of this guide can be obtained by post or e-mail by using the contact details below.
Send your personal finance queries to Weekend Money, Shipman Financial Planning Ltd, 1 Barnfield Crescent, Exeter, EX1 1QY, telephone 01392 278491 or email firstname.lastname@example.org. This article is for general information only and reflects the views of the author only. You should seek professional advice in respect of your own circumstances. Authorised and regulated by the Financial Services Authority. Shipman Financial Planning is a highly respected IFA offering personal service and innovative advice.