You are here: Home - Investing - Experienced Investor - News -

MARKET VOLATILITY: Selling everything is the worst advice

Written by: Michelle McGrade
Investors should ride the storm and avoid panic selling, says Michelle McGrade chief investment officer at TD Direct Investing. 

Taking such a short term outlook is damaging. There’s no doubt that people will be looking at what’s happening in the markets and wondering whether to sell out. However, people should not be panicking, instead, they should be looking for opportunities to add to their portfolio and stay in it for the long term.

Since the Lehman crisis in 2008, markets have grown significantly, in fact they have grown over 100% which means to sell everything then would have been the wrong thing to do. The current market bears a resemblance to January 2009, however, now while the world may have its problems it’s no longer in crisis and we should let things run their course and leave markets to rectify the issues, and central banks should step away attempting to control the global economy.

China and oil

China continues to send ripple effects all over the world. It has strong ambitions to grow up and wants to be taken seriously as a developed, not developing, country. But this takes time. Growth is slowing and the rest of the world is reeling. Couple that with oil – which was never going to stay at or over $100 forever, and how the falling oil price continues to impact companies and markets and you get volatile times.

There are continued overreactions to the situation, but oil has come down to its long-term trend and should soon settle. The Chinese stockmarket needed to rebase itself as it was built on speculation.  If you look back longer term, oil prices have been around the $30 mark and it was only when growth in China and the rest of the world was firing on all cylinders that the oil price peaked in 2009 at $140.

Not all doom and gloom

All the hype is creating a situation where people feel they need to sell.  What’s important is that investors remain focused on the long-term and find opportunities to add to their portfolio.  It’s not all doom and gloom. There are opportunities to be had in areas such as disruptive growth and sustainability; looking at companies that are driving performance by disrupting their sectors and looking for profitable ways to make the world a better place. Japan was the best performing market in 2015, and as long as you are considered there are also opportunities close to home in the UK, as companies continue to feel more positive about their outlook.

What’s important now is for people to review their portfolio and make sure it meets their investment goals. Investors need to look at the facts, seek out information on potential opportunities and hold their nerve.  It could be tempting to sell but previous experience tells us that doing this may mean you’re not in the market when the bounce back comes.


There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Flight cancelled or delayed? Your rights explained

With no sign of the problems in UK aviation easing over the peak summer period, many will worry whether holida...

Rail strikes: Your travel and refund rights

Thousands of railway workers will strike across three days this week, grinding much of the transport system to...

How your monthly bills could rise as the base rate reaches 1.25%

The Bank of England has raised the base rate to 1.25% as predicted – the fifth consecutive rise in just six ...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week