Investment strategies for a summer of uncertainty
By Kirsten Hastings, 25 May 16
Summer 2016 will present a number of geo-political concerns for investors – the biggest of which is the run up to, and the aftermath of, the EU Referendum vote. Click through the slides below to see what Tom Stevenson, investment director for personal investing at Fidelity International, suggests investors can do to prepare themselves for a potential summer of volatility.
“While the EU referendum is clearly unsettling investors, it is essential to hold your nerve if markets get choppy,” Stevenson said.
“Wholesale moves in and out of the market are rarely a good idea. First, because the trading costs involved are too high to make such a radical move sensible. Over-trading always eats into investment returns and is best avoided.
“Second, because markets are great discounters of news. Investors have been factoring in the possibility of an EU exit for some months now so there is a real possibility that a vote to stay in would result in a big rally in markets. Being out of the market this summer looks riskier than ever.
“It is also worth remembering that staying fully invested through market cycles makes sense because missing even a handful of the best days in the market can seriously compromise your long-term returns.
“The best days in the market invariably follow close behind the worst ones – time in the market matters more than timing the market.”
