Advisers should encourage their clients to avoid market noise and concentrate on their long-term investment goals, a fund manager has said.
Tineke Frikkee, manager of the £44m Smith & Williamson UK Equity Income fund, said it was important for her as an investor not to get carried away by the fear factor but to concentrate on long-term fundamentals of stocks.
For example, she said she bought National Grid in January after it was hit along with the rest of the sector by concerns about political interference in the UK.
However, she pointed out that half its earnings are from the US, diluting any effect of UK regulation. And, as a gas and electricity distributor, its clients are the producers, not end consumers. It is therefore less politically sensitive.
Ms Frikkee added: “Typically, I buy on fear.”
Adviser view
Sebastian Hurst, IFA for London-based Plutus Wealth Management, said: “Investors do react more strongly to fear than to positive stories. I get angry at scaremongering in the press because it puts people off. Of course, if you are well diversified enough, what happens to one stock will not matter much.”
