Richard T Lishman – Managing Director of the 4dentists Group of companies
As you’re probably already aware, the stock market is a volatile beast. In the last year especially, the stock market has undergone a number of interesting fluctuations dictated by the global pandemic, fuelled by the uncertainty of the situation and what this has meant for businesses and other investments across the globe.
But as the market stabilises, is it now a good opportunity to look into investing in stocks and shares?
The recent rollercoaster for the market
In 2020, it only took 33 days for the market to crash spectacularly as a result of the outbreak of Covid-19. During this time, the Standard & Poor’s 500 (S&P – effectively an indicator of the general health of the stock market) plummeted by nearly 34%. Throughout this time, there were days that eradicated years of gains in mere moments, leaving many people concerned about the future of the stock market and the recession this would inevitably cause.[i]
However, by mid-August in 2020, the market had made a remarkable recovery. Against many predictions, the market rocketed with the S&P 500 experiencing record-breaking highs.
As you can see – even in the space of six months the market can completely transform, even in ways that go against what the experts expect. In light of this, it’s always a good idea to keep this unpredictability in mind if you are looking to enter the stock market – nothing is ever guaranteed.
However, if this is something that you want to pursue, there are a number of other things you should bear in mind.
The essential ingredients
Investing in stocks and shares isn’t as simple as channelling funds into the system and hoping for a good return. Initially, you need to have the funds available to work with. It’s generally a good idea to take as little risk as possible on this front – if you have the capital available and unused, losses won’t impact your livelihood or that of your family and those around you – remember, the stock market is effectively a gamble.
If you have funds set aside already, you also need to explore your options. Stocks and shares are only one possibility for financial investment, and it’s important to remember this as you consider what steps to take moving forward. As the market is volatile and unpredictable, there is no shame in investing your funds in a more stable, guaranteed venture if you are worried about what a loss could mean.
What sort of broker?
The stock market is open to anyone to dabble in, but that doesn’t mean that you should rush in without thinking. Many people use the services of a stock broker, especially when they are starting out, as these individuals can share an immense amount of knowledge and help you to make a sound investment.
There are many different brokers out there, and choosing one who best suits your goals is the best initial step. There are stockbrokers who can either be employed to advise you or buy the shares on your behalf, using their own judgement. Both are viable approaches, but for beginners, the industry insight from these individuals is usually an appreciated benefit.
Your bank or building society may also have a stock broking department, and there are stock shops that exist that may be affiliated with your bank (though these can be independent too). These are another viable starting point and will be manned by professionals who can also provide you with advice on how to enter the market.
In recent years, a number of online traders have appeared, giving you the chance to instantly assess a number of options. Online traders are effectively just a digital version of the services you would receive elsewhere, and have fast become a preferred choice for people who want to want to oversee the process remotely.
In some situations, you may even be able to buy stocks and shares directly from a company. The company is likely to advertise their shares on their website or even on their social media, so it’s a good idea to keep an eye out if there are any companies in particular that you would like to invest in.
Advice is essential
The stock market can be an overwhelming prospect, especially as there is plenty of unique lingo and other strange quirks that can make understanding it all the more difficult. This is why advice from a trusted source is essential.
The award-winning team at money4dentists have years of experience helping dental professionals enter the stock market and make sound investments. The team can also help with all of your personal financial goals, whether that’s helping you to understand and manage your tax, looking at your pension and insurance schemes or even helping to prepare you for retirement.
A roll of the dice
So, to return to the question of whether now is a good time to enter the stock market, the answer really depends on how you approach it. There is never a guarantee that investments will be fruitful, but with the market currently performing very well, there’s a chance that there are some very smart investments to be made.
For more information please call 0845 345 5060 or 0754DENTIST.
[i] Forbes Advisor. 2021 Stock Market Outlook, Covid Vaccine, Political gridlock, Possible Recovery. Link: https://www.forbes.com/advisor/investing/stock-market-outlook-2021/ [Last accessed July 21].
Richard who is from North Yorkshire moved to the Midlands over 20 years ago to start his career in Financial Services. He set up practice in the 90’s and subsequently co-founded ‘money4dentists’ which is a multi award winning firm and is widely recognised as the leading specialist IFA to dentists. Richard is well known within dentistry and has a Yorkshireman’s passion for saving money and tax, and passes on this valuable knowledge to clients.
Richard’s passion for helping clients gave him the idea to launch a “one stop” shop, and the 4dentists group was formed. The professional services group offers dentists advice on legal, tax, consultancy, practice sales & acquisitions, recruitment, insurance and training.
As Group Managing Director, Richard spends time educating the dental community lecturing around the UK and overseas as well as contributing regularly to the dental press on topics such as the Budget to the latest tax and financial changes. Richard is also a member of the Association of Specialist Providers to Dentists (ASPD).