Wednesday 24 January 2018

Investors are told to hold their nerve and ignore the turmoil

Charlie Weston

Charlie Weston

INVESTORS were urged not to panic yesterday following the plunges on stock markets around the world in the past few days.

Many markets rebounded in the afternoon, but despite this the Irish market is still down 14pc in the year to date.

The Irish Stock Exchange has been one of the worst affected in the world by the global markets meltdown.

But yesterday personal finance experts said share prices would rise again, and people should not sell out of equities now.

Anyone worried about their pension being heavily exposed to equities should remember that pensions are long-term investments and the falls would be smoothed out over time.

Accountant and founder of Brendan Burgess said that people should keep faith with the stock markets.

"If you take money out of the stock markets to put it on deposit, you are sure to lose money because of inflation which is running at 5pc at the moment," he said.

People should be aware that it was impossible to eliminate risk, but with shares people were more likely to make gains.

"I would invest in AIB or Bank of Ireland rather than putting money on deposit with them. These banks have no direct exposure to the US sub-prime market, as far as we know."

He said that markets tend to overdo the falls, and rise too strongly during the peaks.

Mr Burgess said that in the case of both investments and pensions it was wise to just check them once a year.

Chairman of the Professional Insurance Brokers Association Liam FitzPatrick said anyone selling out of equities now would be just crystalising losses, and miss out any future rises.

"This is a wobble and we have had them before and we will be them again. The underlying economic fundamentals are pretty sound. The problems are specific to the banking sector."

Pensions consultant Deloitte said people should realise that pensions were a long-term investment.

Rachel O'Sullivan of Deloitte said those with pensions would be wise to review them once a year rather than panicking or reacting more often than that. Markets would rise again, she said.

Financial adviser Liam Ferguson said that people who invest in stock markets should be aware that there will be peaks and troughs.

"The last thing you should do when a correction comes along is sell out. The losses at the moment are paper losses; they only become real losses if you decide to sell."

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