The current challenging market conditions may last for some time but most people who have invested should try to sit through it, according to an investments expert.
Recent days have seen markets fall sharply on the back of the US tariffs announcement last week however Kevin Quinn, Bank of Ireland’s chief invement strategist, said this is an uncomfortable part of investing.
“It’s reminiscent of things like 2000, things like 2008, what we saw in Covid and even in 2022,” he said. “I unfortunately have experienced this more times than I’d like to mention over the last 30 years or so.”
“Sharp drop downs like this are part of the investment process,” he said.
“Equally large gains – like we saw in the last couple of years – are part of the investment process
The best advice in general would be to sit through it.”
In some cases, though – for example people who know they will need access to their money in the near future – it may be wise to make some kind of move or adjustment at this stage. He said it was always best to seek out tailor-made advice on these matters.
“There are possibly a couple of territories where people need to think a little bit more deeply, particularly if their need for use of the money is more short-term – because I do think we’re going to have choppy waters for a little while yet,” he said.
Overall, though, Mr Quinn said it was important to note that the recent sharp falls come on the back of remarkable gains for most markets – with stocks performing particularly well late last year, following Donald Trump’s election victory.
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The recent falls mean most of this “froth” has now been taken away, he said, putting markets back at levels seen around August 2024.
The latest market headaches come at a time when there is increased interest in investing, according to Bank of Ireland’s latest Savings and Investment Index.
Mr Quinn suggested that this could be thanks to how markets performed between 2023 and 2024, with significant gains during that time.
However despite the increased interest, the survey – which was conducted before President Trump announced his tariff plan – did show a dip in sentiment among investors.
“When we look back on the period of the latter part of 2024, there was a lot of exuberance around the post-Trump election period – people would have talked of the Trump Trades,” he said. “They’re now talking about the Trump Slump. We’ve largely given back the gains in markets that were made since the middle of last year.”
The BOI survey also showed a rise in the number of people saving – with the country’s savings habit returning close to pre-pandemic norms.
However the amount people were able to save was down, as cost of living pressures made it harder for people to put as much aside.
‘Not a time to panic’
Meanwhile, the co-founder and co-director of online investment firm Regionally said that this is not the time to panic.
Speaking on RTÉ’s Morning Ireland, Mr Urquhart Stewart explained that the figures emerging from China and Japan show that they are catching up with the rest of the world.
“They had a holiday last week – the rest of the world was going into a difficult time and now they’re just catching up, so the headline figures will look rather frightening,” he said.
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“To put this into perspective, it’s a frightening drop down in terms of some of the valuations, but this happens sadly on a regular basis,” he added.
Mr Urquhart Stewart said that there is a global “slowdown” at the moment and said that it is uncertain whether that will transpire into a recession.
He added that the EU is already weakened.
“The last thing they need is sudden, extra taxes laden on them, particularly as those key exporters,” he said.
“The key word that runs an economy is ‘confidence’, and basically what Trump is doing is he’s actually made sure the rest of the world has no confidence, they can’t see what’s going on,” he stated.
Mr Urquhart Stewart said that investors should not panic over this, as this is something which happens to markets “on a regular basis”.
