‘Don’t panic,’ says BT
It is inevitable that we will face market crises in the future, but we should avoid panic selling and ride the waves, according to BT Super for Life head Melanie Evans.
“Economies and markets are often affected by unexpected economic, political or natural calamities, like the current US sub-prime mortgage crisis,” Evans said.
“The key for investors is to stay calm, focus on investment fundamentals and remember that long-term investors have nothing to gain from short-term reactions.”
In a special market update for investors released today, BT cites many times in recent history when international share markets have been affected by major events.
The report points out that the Asian currency crisis, the Russian bond market default and the September 11 attacks on the World Trade Centre are all examples of events that temporarily pushed down share markets, but did not have a long-term negative affect.
Diversifying your portfolio, understanding risk and dollar cost averaging are some of the ways BT recommends protecting yourself from volatile markets.
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