Share Prices Still Falling Through The Floor

The FTSE 100 sank through the floor again despite a huge £330 billion business rescue package announce by Chancellor Rishi Sunak the day before.

Trading ended the day at 5,080, 4% down on the previous day, wiping out moderate gains.

The FTSE and Wall Street rallied after Sunak and President Donald Trump revealed spending plans to keep the economy afloat during the coronavirus crisis.

Sunak handed out cash to help small businesses, while Trump is set to dole out $850 billion to bolster the US economy.

But these unprecedented aid packages failed to satisfy the markets.

Wall Street echoed the FTSE losses, with Nasdaq and S&P 500 both ending the day 7% down.

Pound sinks

The Pound also had the worst day for 34 years against the US dollar, finishing at $1.16, after losing 11% in value in two weeks.

The problem with the markets is investors cannot predict the value of shares at any reasonable time over the coming months.

However, investments are a long term activity, which means although prices are at the lowest for many years, they are likely to recover in the future.

Good news if you have time on your side, but a disaster if you are about to retire or rely on the income from savings and investments to pay the bills.

Only two prices matter

One British financial expert, Martin Lewis, explains this.

“if you’ve got a nice widespread you shouldn’t lose it all,” he said.

“The most important thing to say is, if you’ve just invested, I hope you’ve invested for the long term.

“That’s what you do when you put money in stocks and shares, it’s a five-year minimum investment.”

“The most important thing to say is, if you’ve just invested, I hope you’ve invested for the long term.

“There are only two prices that matter on stocks and shares.

“The price you buy them for, and the price you sell them for. What happens in the middle is irrelevant.

“So if you don’t have to crystallise anything at the moment – we hope, no-one knows, we don’t have a crystal ball – in a year, or two, or more likely five, over that long term period, we will move back to normal.”

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