Increased market volatility and share market falls have many investors wondering about the future.

Have the markets topped out? Are we heading for a market correction? Do I need to change my investment strategy? Should I look at investing in property instead of shares?

In deciding your response to some of these questions, consider the BDO Private Wealth team’s top five ‘things to remember’ when navigating investment in uncertain times:

1. Avoid the noise

The abundance of information available online, in the news and in our inboxes can lead to information overload, clouding our vision and distracting us from our investment strategy. Remember, most news outlets report the share markets with a short-term view. We take a longer view and remind our clients to focus on long-term growth, rather than short-term fluctuations.

2. Don’t check your portfolio too regularly

It can be tempting to log in and see where your account balance and investments are at, which we suggest doing from time to time. However, try to avoid logging in too frequently – you may find yourself frantically caught up in the day-to-day movements of values rather than calmly maintaining a longer-term view.

3. Stay the course

Market downturns can be hard to stomach, but it’s best to maintain a disciplined approach through market cycles. Some investors think that they can sell out of their investment and buy back in when prices start to grow again – but this sort of activity can be costly. People often ‘miss the boat’ and end up buying back at a higher price than they sold at. Meanwhile, they have crystallised their losses and potentially destroyed wealth at the same time. In times like these, remember your established plan and stick with it.

4. Consider the best use for your cash

We usually recommend retaining a level of cash as part of your investment strategy, to cover foreseeable pension payments or ongoing expenses for 12 to 18 months. This prevents a scenario where you may be forced to sell investments at unfavourable times, for example while markets are down.

Alternatively, if you have cash that doesn’t need to be retained for this purpose, down markets can be a good time to invest given that prices are lower. You will get more units of the investment, which will work in your favour once the market rebounds.

5. Make decisions that suit your circumstances

Finally, one of the most important things that anyone can do when faced with concerns or anxiety over sudden fluctuations in their investments or superannuation is to seek professional financial advice. Speaking to an experienced adviser who understands your unique financial position, goals and stage of life can help you to make the right decisions for your circumstances and keep you on track through highs and lows.

This publication has been carefully prepared, but it has been written in general terms and should be seen as broad guidance only. The publication cannot be relied upon to cover specific situations and you should not act, or refrain from acting, upon the information contained therein without obtaining specific professional advice. Please contact the BDO member firms in Australia to discuss these matters in the context of your particular circumstances. BDO Australia Ltd and each BDO member firm in Australia, their partners and/or directors, employees and agents do not accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this publication or for any decision based on it.

BDO Private Wealth Advisers Pty Ltd ABN 62 805 149 677 AFS Licence No. 238280 is a member of a national association of separate member firms which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Private Wealth Advisers Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of separate member firms. Liability limited by a scheme approved under Professional Standards Legislation.

BDO is the brand name for the BDO network and for each of the BDO member firms.

This article was first published at bdo.com.au on February 7, 2022.