By ROSIE MURRAY-WEST, FINANCIAL MAIL ON SUNDAY, 19 June 2022:
With stock markets continuing to fall in recent days, many investment experts have reverted to using the ‘V’ word. That’s not V for victory, but V for ‘volatility’ – a term that seems to change its meaning when share price are in freefall.
The FTSE 100 Index of leading shares has been 22 per cent more volatile than average in the past week…
So how can you stay calm during the market shocks? Financial experts say it’s a matter of holding your nerve and picking the right investment funds and stocks.
Start with history…but don’t be complacent
Hindsight is a wonderful thing, and though we do not know exactly where the stock market is going, we do know where it has been…
Monthly savings can help soften the blow
When the stock market is in rollercoaster mode, it can be hard to know exactly when to get on and off.
Consider cautious investments
Matthew Read, senior analyst at data group QuotedData, suggests exposure to funds that invest in bonds, whether issued by governments or companies.
Although bond prices do fall and rise, he says a good manager can ‘diversify a lot of the risk away’, thereby generating a steady mix of income and capital return. He recommends investment trust CQS New City High Yield – a fund that currently provides an income equivalent to more than eight per cent a year.
Read also recommends infrastructure investment funds, especially those focused on renewable energy.
For example, Downing Renewables and Infrastructure has generated a one-year return of 20 per cent. Its portfolio comprises investments in 17 hydropower plants in Sweden, wind farms and solar energy farms.
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