Investment articles:

Keeping calm, carrying on

2018 was a challenging year for investors with money in shares and investment funds. Stock markets around the world suffered from turbulence as a result of economic and political uncertainty, ranging from the US’s increasingly protectionist trade policies to the Brexit negotiations.

Monique Wong, senior portfolio manager at private bank Coutts gives her tips for dealing with volatile markets.  

2018 saw two corrections – defined as a fall in value from a previous peak of 10% or more – on major global markets, whereas in 2017 there were none.

For investors seeing markets fall it can be tempting to sell in the hope of avoiding the worst of any losses. But this approach is likely to be the opposite of a productive strategy, according to Wong.

All of the strategies we run are meant to be with investment time horizons of five years or more.

It is for this reason that investing in shares is better suited to long-term goals such as saving for children’s university fees or for your own retirement. If you invest money that you might need access to within a year or two, you run a greater risk of having lost some of your capital when you come to cash in.

With a longer investment timeframe, your shares or funds have more opportunity to ride out any periods of low or negative growth and return to positive territory.

Cashing in investments after they have fallen in value crystallises the loss.

If you've already invested online through Royal Bank Invest, you can track the progress of your investment as and when you want with your online investment account.