Keep calm and stay invested

THE biggest mistake investors make during times of turmoil is to panic. It happens to the best of us: we make hasty decisions when markets are sliding, only to realise later that we would have achieved better results if we had stayed calm.

In 2016, for example, investors who panicked when markets were roiling ended the year worse off. The MSCI All-Country World Index fell as much as 12 per cent early in the year on fears of a China hard landing, but quickly bounced back by the end of March and finished the year 6 per cent higher.

Looking further back, an investor who missed just five of the strongest days on the S&P 500 index between 1990 and 2015 would have negatively impacted returns by over 30 per cent. Or take the global financial crisis: few investors had the nerve to buy into markets in December 2008, but those who stayed invested would have profited from the strong rebound.