When markets are performing it’s easy to sit back and watch investments rise in value. However it’s a different story when markets are not performing so well and uncertainty abounds. So how do experienced investors handle this.

RECOGNISE THE CYCLE:
Financial markets are all prone to move in cycles. Sometimes the troughs feel like they will last forever but they do eventually end and move on to higher levels.


DIVERSIFY:
One of the most important rules for successful investing. Diversify across asset classes, markets, geographical regions, managers or companies.


AVOID CROWDS:
The worst time to invest is when everyone else is rushing in. Become a contrarian investor whilst still applying fundamental quality tests.


BUY AND HOLD:
Buy quality investments and hold them – at least until they have had time to achieve their expected return. Very few investors make money through speculating.


THIS TIME IS NOT DIFFERENT:
When the market goes dramatically up or down there is a tendency to cry “this time it’s different”. This time is definitely not different.


DON’T BE SWAYED BY HIGH RETURNS:
Don’t chase last year’s winners – look for this year’s opportunities.


INVEST REGULARLY:
Implement a disciplined savings plan often referred to as “Dollar Cost Averaging” – a little bit often can build up to a lot.


CONSIDER TAX IMPLICATIONS:
If you are a wealth builder, seek capital gains in preference to income. If you need income, investigate different structures that help to minimise tax.


HAVE A REGULAR CHECKUP:
Review your investments and strategy on a regular basis. Work with a professional financial adviser who will help you achieve your objectives.



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