– This is some of what comes with being invested in the stock market. Everyone who saves in mutual funds must take risks that are adapted to their own finances, says interest rate and currency strategist Nils Kristian Knudsen at Handelsbanken to NTB.
Do you sit and watch in horror as the returns on the equity funds follow along when the stock exchanges, both internationally and here at home, are apparently in free fall? There is no reason to do anything other than sit quietly in the boat – unless you lose sleep at night with worry, agrees consumer economist Magne Gundersen at Sparebank 1.
– If anything, this could be a good opportunity to buy more. The shares are 3-4 per cent cheaper today than they were last Friday, he points out to NTB.
About half of all Norwegians over the age of 18 have shares in mutual funds, according to figures from the Verdipapirfondenes forening (VFF). In total, this is over a staggering NOK 407 billion in equity funds alone. A stock market fall of 3 per cent, which was the case in Oslo on Monday morning, means that values of over NOK 12 billion evaporated almost overnight.
Fund better than bank
But mutual funds have so far risen by 4.5 per cent this year – after Monday’s fall of 3 per cent has been subtracted. Over the past three years, values on the Oslo Stock Exchange have risen by a total of 19 per cent, and internationally the development has been at least as good.
According to Gundersen, it is not exactly a question of people having lost their fortunes.
– In general, it is a bad strategy to sell in a panic, says Gundersen to those who may feel that the ship is headed and that they must jump overboard before it sinks.
– If you have had your savings in shares for the past three years, you have received a far better return than if you had kept them in the bank, says Gundersen.
All the economists NTB has been in contact with emphasize the long-term perspective you must have when saving in funds. Risk and market fluctuations are part of the game and something you have to accept when you enter. There is no reason to do anything else now than what you had planned when you started saving, says VFF director Christian Henriksen.
– That things go downhill is part of the risk you take. You should be prepared for that when you invest, says Henriksen.
Savings in the long term
– The long term is your friend, says Henriksen and points out that even if things fluctuate in the short term, there is generally a good increase in values in the long term in the stock market.
He points out that over the years we have also experienced crashes, financial crises, economic downturns and occasionally deep falls in Norwegian and international indices. But history has repeatedly shown that periods of decline are temporary, and that the stock market gives good returns in the longer term.
– We have now been through a long period of growth and relatively stable markets with small fluctuations. It can make it feel extra strong for many when it fluctuates as strongly as it does now, he says.
The main index on Oslo Børs was in free fall in the first seconds after opening on Monday morning. After around one minute of trading, it was down 4 percent. In the following minutes, the decimals continued to tick down before it seemed to stabilize. The development was the same on the other Nordic exchanges and on the most important exchanges in Europe.
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2024-08-05 09:28:44
