After a tough financial year, is now the time to discuss your finances?

In April 2015, the UK’s major stock market – the FTSE 100TM – climbed to a new record high. Barely eight months later, it had slumped by more than 20%. Market rises and falls might be part and parcel of life as an investor, but the last 12 months have seen some large extremes.

In the mid-part of 2015, there was a great deal of uncertainty over Greece’s financial future and, with it, the Eurozone. Despite heavy political turmoil, that crisis was averted, but then attention quickly shifted to the world’s largest economy. China has endured an economic slowdown that has had a wide-ranging impact, with many markets enduring falls.

Next came the issue of falling in oil prices, from a 2014 peak of $115 a barrel, to a 12-year low of $28 in early January. Countries whose economies are heavily dependent on oil production – such as the UK – have been hurt by these tumbles.

With the growing uncertainty over the UK’s future in the European Union, and the European Central Bank having introduced yet more monetary stimulus support for the region, these testing times for markets look set the continue for much of 2016. Investors should strap themselves in for a bumpy ride.

Not that it is all doom and gloom, far from it. When some countries and industries struggle, others can find opportunities and prosper from the changing landscape. Certainly there can be plenty of winners from the fall in oil prices. For example, the fact it is cheaper for all of us to fill up our cars means we have more money to spend on other items. Other companies can benefit from this, which in turn boosts investors with holdings in these organisations and sectors.

Whilst it is true that some asset classes and companies have seen their valuations fall, hurting investors with holdings, this might prove to be a short-term blip. Investors who remain composed may not make the mistake of encashing their holdings in haste. Doing so risks incurring losses, whilst denying them the opportunity to potentially benefit from future recoveries and gains. As the famous American investor Warren Buffet put it, “If you aren’t thinking about owning a stock for 10 years, don’t even think about owning it for 10 minutes.”

Nevertheless, it makes a lot of sense to review your investments following a period of market volatility. By doing so you can check if their performance is what you could realistically have expected over the previous 12 months, or if you need to consider making changes.

For example, if you hold an investment that is designed to perform well during market rises, but is susceptible to struggle when they fall, it stands to reason it is likely to have underperformed over the previous 12 months. That doesn’t mean you should encash it, as it might continue to be suitably positioned to benefit from rises in the long-term. However, if you have a more cautious investment that aims to preserve capital during market falls, but it failed to do so adequately enough, you might wish to consider your options.

Ultimately, you should look to speak to an adviser and ask for their expert help. They can review the performance of your investments and – crucially – assess if you remain on track to achieve your financial goals. If it looks as though you need to consider making changes, they can outline your options and make recommendations.