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A message from our Co-founder

By CIRCA5000 TeamBack to Mission Control

A message from our co-founder on performance

Dear investor,

In recent weeks, the overall value of major stock markets have been falling due to fears of inflation, rising interest rates, and global supply chain shortages. Right now it’s hard to envisage when this sentiment might improve.

As an investor in CIRCA5000, you will be aware of these factors affecting the value of your portfolio. Whilst it may not be of great comfort, these changes have been affecting all major stock markets (not just CIRCA5000).

Perspective:

The point I want to make in this message is that it's all about perspective.

To quote Warren Buffett (widely regarded as the most successful investor of all time);

“We're a net buyer of stocks over time. Most people are savers, they should want the market to go down. They should want to buy at a lower price.”

Given the current environment, it’s worth paying attention to what investors like Warren Buffett are doing. The answer: he’s buying right now (in a big way) rather than selling.

If you were looking to get onto the property ladder as a first-time buyer, a 10% drop in house prices would probably sound quite appealing. That's like seeing a 10% off discount offer on a house.

With stocks, it's not much different.

S&P 500 performance over the last 20 years. It’s all about perspective.

Buying at a discount:

Yes, right now the value of your portfolio might have gone down. And that might make you feel uncomfortable.

But I invite you to think of it a different way. Change your perspective.

What if I told you can now buy stocks at a 10% discount. You can buy the same quantity, but for a reduced price.

We do not know that prices won't fall further over the next few weeks, or when they will recover.

But looking back over the history of the stock market, so far, since major stock markets opened some 200 years ago, 100% of "corrections" (i.e. dips) and crashes have always been followed by a recovery that comfortably offsets those losses.

Some of the best performing days in the stock market come after a downturn. Withdrawing after a downturn means you may “lock in” your losses, missing some of the best days of performance.

What has happened historically on the S&P 500 when investors miss the best days of performance having sold at a loss.

Invest regularly:

By investing using our Regular Payments features with something like a Monthly top-up, or Round-ups, you get to become what Warren Buffet calls a net buyer. You continue to buy stocks when they are cheaper - without even thinking about it. We call this investing on autopilot.

Should I withdraw?

Well, that’s up to you. If your portfolio is at a loss, then selling (or withdrawing) only locks in those losses forever. And it means you won’t get to buy into the market when prices are cheaper.

Overall, we advocate for thinking long-term (5, 10, 20+ years), investing regularly (via a monthly top-up) and sticking to your plan.

If you have any questions, give us a shout. We're always here to help.

Yours,

Matt

Co-founder

CIRCA5000 does not offer financial advice. Remember, investing is for the long-term. Capital is at risk and your investments may go up as well as down.

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