Craigs Investment Partners, February 2022

1. This is when your adviser earns their keep

The role of a good adviser is not to make predictions, provide trading ideas or to be a great stock picker. He or she will add significant value to your lifetime wealth by ensuring you maintain a disciplined strategy, talking you out of poor decisions you will be tempted to make during unnerving periods like this one, and reminding you of how best to achieve your long-term objectives.

2. Your goals haven't changes, neither should your strategy.

Most of us are investing in the hope of meeting our long-term objectives, which usually stretch many years into the future. With that in mind, it makes little sense to react to weekly, monthly or even yearly volatility. Investing isn’t about chasing the ups and downs of the market, it’s about managing a well-constructed portfolio in line with your goals and objectives. Play the long game, stay the course and stick to your strategy.

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3. Keep your 'defensive line' intact

Many investors have diversified portfolios, which means they also hold some cash, good quality fixed income and possibly even a small amount of gold. This part of your portfolio will have held its own during recent months and has probably even gone up in value. Your lower risk assets are doing their job, so there’s no need to sub them off.

4. Should we sell everything, ride this out then get back in later?

If markets fall further, selling up could be the right thing to do – but only if you’re good enough to get back in at the right time. If you’re a long-term investor rather than a trader, you might be better off just staying put. Corrections, bear markets and recessions will come and go, but great businesses often remain resilient, keep paying dividends and rediscover their former glory sooner or later.

5. Stay diversified, being at extremes is a poor strategy

Investing isn’t about being ‘in or out’ of the market, contrary to what some might have you believe. Economies, markets and currencies ebb and flow, so hedging your bets across different asset classes, geographies and sectors is the safest route for most of us. If you’re fully invested in shares you open yourself up to the full force of volatile periods, but you’ll do your future self just as much of a disservice by sitting on the side lines and missing out on all the strong periods.

6. If you're an accumulator or a new investor, it might be time to start taking some risks

If you need to cash up your portfolio and call on your money soon, periods like this are awful. However, if you’ve got cash to put to work or if you’re a younger investor, they can be a great opportunity. Prices could go down further, but we’ve already seen some hefty falls so it’s a good time to think about taking advantage. Be patient, take your time, and invest in instalments.

7. Stay calm, and don't panic

It’s hard not to feel overwhelmed by all the negative news. However, we don’t make our best decisions when we panic. Stay calm, take a step back, and lean on your trusted adviser for support and guidance.