Dr Bevan Blair, CIO at Financial Planning firm One Four Nine, has warned advisers to avoid letting client emotions take control of investment decisions for the rest of 2022.

Planners should sit tight, stay calm and ride out the storm, he said.

He said it was important that Financial Planners encouraged their clients not to make rash decisions due to current economic turbulence caused by high inflation, strikes and negative economic growth.

Dr Blair said: “Central banks have essentially been walking a tightrope between inflation and recession and understandably markets reacted to this situation by selling off significantly in the second quarter of 2022. While it might be tempting to follow suit, it is important not to make rash decisions, but to view the situation with a long-term lens and a level head.”

He added that Financial Planners should remind clients that periods of poor investment performance often follow market’s worst days and that those who chose to exit equity investments may regret their decision later.

He said: “Once we own an investment, it is easy to let emotions such as fear or anxiety take over and get in the way of good judgement. This can also lead to the misconception that selling investments can give you some control over market movements.

“However, history shows us that the market’s worst days tend to be followed by its best, and as such you may miss out on recovery if you sell amid periods of high volatility. For example, those who did exit the stock market earlier in the year will have crystalised their losses and may have missed out on the recovery rally enjoyed throughout July. 

“This hasn’t been the first time we’ve experienced these cataclysmic changes in markets. Over the years and decades events take place that trigger us to react to mitigate what is going on in markets, but markets are very resilient, and recoveries can be swift when sentiment changes. Often, the best way to get through it is by sitting tight, staying calm and riding out the storm.”

Dr Bevan Blair is chief investment officer at Financial Planning firm One Four Nine. The Financial Planning firm launched in October last year with the acquisition of Charter Financial Planning and Rice Whatmough Crozier. It is funded by private equity firm Copper Street Capital.

The firm has since made a number of Financial Planner acquisitions including Russell Gisbson Financial, APC Financial Solutions and Total Wealth Planning.