With the shocking events in Ukraine uppermost in our thoughts, it seems almost heretical to ponder the effect of the war on share prices.
Nevertheless, ponder we must because stock markets never sleep.
Investors need some “hand holding” and reminders at uncertain times like these.
Particularly as some wonder why their portfolios have fallen recently while the FTSE 100 has, in the main, stayed high.
It is because these are invested on a global basis.
For example, over the last three months the UK is in positive territory while the global markets aren’t. However, the three and five year figures show significant outperformance by overseas markets compared to ours.
You should always leave slightly too much in cash so if monies are needed at times like this then there are liquid reserves available and hence dipping into investments at the wrong time can be avoided.
Bevan Blair, chief investment officer at One Four Nine Portfolio Management, told International Adviser that investors should do nothing.
He stated: “Advisers should be telling their clients to stick with their current plans.
“When volatility is high and the market is febrile, it is only luck and not skill that will determine the short-term performance if you are minded to try and time the market. Stay invested and look through to the long term.
“The message is to ride out the short-term noise. At the moment, the uncertainty of the conflict, where it takes us and what the consequences are, is too high to play with clients’ hard earned wealth.
“Stay the course with the current plan and when we get more clarity or markets calm down assess how the objectives of that plan have changed, if at all.”
Nevertheless, are multi-asset portfolios structured well enough to tackle the issues around the conflict and rising inflation?
Mr Blair added: “A war in Europe is frankly something no money manager would have been prepared for and an escalation would place all markets under incredible stress, especially from a diversification stand point.
“Some may be favoured in the short term, including gold, commodities, sovereign debt. But they have to function normally to be of value. If things deteriorated there is no guarantee that these markets would function normally.”
Quilter urges spooked investors to consult their financial adviser.
It stated: “In turbulent times, advice provides an objective view, giving you peace of mind, so it may just be the best investment you ever make. It is important not to be put off when markets are at a low point because stocks may be cheaper to buy at this time.
“Many people believe that knowing when to buy and when to sell is the secret of successful investing. The truth is that no one knows with certainty when markets will rise or fall. Trying to time the market is very seldom successful.
“The sooner you can start investing, and the longer you can invest for, the more likely it is for you to achieve your financial goals, regardless of any short-term blips.
“A diversified portfolio of a range of different assets can help to iron out the ups and downs of stock markets and also help avoid exposing your portfolio to undue risk. When one asset class is performing poorly others may be flourishing, and vice versa, so avoid concentrating your investments in just one area. If you notice that the value of your investments has reduced, take your time, stick to your plan, and avoid making any hasty decisions.”
Markets are likely to remain volatile for some while.
Financial advisers can help take the emotion out of investing.