At times like these, the common message to clients is not to panic. Is that what your peers are doing this time round, or are any big changes being made?
Adrian Lowcock, Bestinvest
We are telling clients not to panic. There will inevitably be periods where optimism and pessimism take over but, obviously, it is important to make sure clients portfolios are balanced and reviewed. It is important investors avoid companies with exposure to banks. So, we would recommend a focus on healthcare, utilities and companies with good cash flows.
In terms of whether the market crash is a blip or something more sinister, it is difficult to say. There will be buying opportunities but, when markets are down, how do you catch a falling knife?
Philippa Gee, Philippa Gee Wealth Management
The circumstances this time are quite different to what we've experienced in my 20 years in the industry. It's an avalanche of bad news. As one problem is (relatively) sorted out, another one appears. The market will bounce back but I imagine we'll see a few small bounces, then further falls. A prolonged bounce-back is still some time away and it's better to assume trading will be difficult for the next year or two in order to manage clients effectively.
Three weeks ago we wrote to all clients and undertook some pretty significant changes and went more defensive. We moved out of equities particularly and bonds to a certain extent and moved into more strategic funds - those with a high allocation to gold. But we move straight away when the market begins to turn.
Andrew Merricks, Skerritt Consultants
We would not pretend to know what happens next and the way we deal with clients is to deal with them as if it's our own money. We have sold a bit more equities this morning - a bit of Europe, a bit of UK - but the liquid stocks rather than the actively managed funds. The jury is still out on whether this will be another 2008. It might be that QE3 starts over the weekend and it's a good time to buy again next Monday - we just don't know yet.
Tim Cockerill, Ashcourt Rowan Asset Management
From our point of view, we are not rushing to take action on our portfolios. We are telling clients not to worry, that we have been here before and central governments and banks should be a bit wiser than a few years ago.
If investors are concerned then UK gilts are not a bad place to be - we are not part of Europe, we have an austerity package already sorted and our economy looks relatively robust. And because interest rates are low, gilts will give a better return.
Ian Lowes, Lowes Financial Management
This is what markets do - they climb a wall of worry. There are fundamental reasons why the markets suffered a ‘retracement', but we are not overly concerned. There are going to be certain implications for those intending to realise their investments in the short terms, but as all advisers know, investment is a long-term thing. You hang in there and recover. This is a good buying opportunity.
Martin Bamford, Informed Choice
What we have witnessed to date this week amounts to very short-term activity. The first thing to remember when stock markets are falling sharply is that most investors do not have portfolios invested wholly in UK or global stockmarkets. Modern Portfolio Theory explains how blending together different asset classes can result in risk reduction for investors. Dramatic falls in stock market levels are rarely replicated in the fall in the value of diversified investment portfolios.
Nick Platt, director, Henwood Court Financial Planning
The truth is that no one really knows how this situation is going to develop. Trying to time the markets by moving into cash until the markets have bottomed out is a dangerous strategy as when the markets recover we wish to be invested to benefit from the returns associated with the upturn.
Pete Matthew, Jacksons Financial Services
Are we heading back to the crisis days of 2008? We don't think so. Companies seem to be doing well. Of all the large companies in the developed markets that have issued results in the first half of the year, more than 75% of them have beaten analysts' expectation - there is some good news around, you just won't hear it reported on the BBC.
James Norton, Evolve Financial Planning
It's never nice witnessing what's going on but, provided the clients have the right level of risk and liquidity, they should be able to ride it out. Absolutely the wrong thing to do is start selling holdings and panicking. If a client is putting money into a portfolio over time, there's no harm in accelerating investments to take advantage of a dip in the market. Rushing to cash is categorically the wrong thing to do.
Gary Reynolds, CIO, Courtiers
We have some clients emailing through. It's been a bit traumatic and the news has been very negative. Companies don't deserve to be rated as they are at the moment. We've been saying to people it's a buying opportunity at the moment and we've been increasing equity exposure.
We've not been gold bulls but we started short selling gold last night. The only thing that's keeping it up is the belief that it will go higher. It looks like a bubble to me. We're not going to get anywhere near 2008. You always tend to get an echo of the earlier problem and it usually comes two years later. When the financial system itself is damaged, the recovery is always more difficult.
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