It's always best to stay invested in the index

THERE has been a common theme running through the advice given in this column over the past couple of years and that is investors should as far as possible stick to investing in the index.

There are many reasons for this. For instance, when funds suddenly realise that they are under-invested in a market that has under-performed for a few years (like Singapore did in 2015 and 2016) the quickest way to buy exposure is through the main index, or the stocks with the largest market capitalisation.

Then there's the significant shift towards passive investing that has spurred the development and marketing of all sorts of exchange traded funds (ETFs). Rather than actively managing one's portfolio, which would involve timing and selection issues, it's much less stressful and easier to simply buy and hold an ETF.