Volatile stock markets, political uncertainty and worries about economies around the world have led to chaos for investors in recent months.
Manging a portfolio is fraught with fear as the risks just seem to keep piling up.
Plunging oil, gas and commodity prices have seen stock markets wipe billions of the value of exploration and mining companies.
Trumponomics and how the jolly blond giant will settle into the White House are a real concern if he wins the US election after a campaign of intimidation, insults and abuse.
Add to that the woes of the faltering world economy and investors need to make some tough financial decisions in the face of adversity.
Cash offers no interest
Maike Currie, director of personal investing at financial firm Fidelity International, sympathises with the plight of investors and has some suggestions about how to handle a portfolio in such exacting circumstances.
“We’ve thought this through and can see four way investors can tackle the volatility in the markets,” he said.
“All the strategies should apply to investors wherever they are, because all the markets are facing the same problems. It’s only the degree of volatility that seems to change between them.”
Top of the list is protecting capital by switching out of cash.
Interest rates are so low that cash is earning very little on deposit, said Currie.
Go where others fear to tread
“Equity income funds are a way to improve the returns,” he said. “Equity income offers dividends and capital growth, while cash on deposit gives a small yield and no capital growth.”
Currie’s next tip is leave the crowd and look at going against traditional thinking.
“Oil, gas, supermarkets and banks are opportunities at the moment which are shunned by many other investors because of their poor performance,” he said.
“Some fund managers are buying into these sectors at the moment because they are good value and when the global economy starts to grow again, they are likely to pick up as well.”
Currie also urges investors to weed bad stocks and funds out of their portfolios in favour of those that are likely to give better returns and to diversify to lessen the impact of volatility.
“This is the right time to pursue active investing and prune the bad performers,” he said.
