Wealth and investment managers are warning their clients to take a “long-term view” after Donald Trump’s tariff plan reduced the value of many investment portfolios.
Many investors have seen losses after the US Government announced a plan to introduce tariffs on many countries’ imports, which sent shares in companies around the world down.
Investment companies say they are fielding calls from concerned clients but are telling them that dips in value for short periods are a “normal” part of investing.
People with money in stocks and shares ISAs or other investment accounts are being told that selling when stocks dip can be “one of the worst things” to do.
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Gianpaolo Mantini, a partner at wealth management firm Saltus, said he had received “several” calls from concerned clients.
“Ultimately, most of these are seeking reassurance, looking for context and a sympathetic ear. This is not the first, nor will it be the last time that markets suffer a temporary correction,” he said.
He added: “Take a step back from the noise, focus on those things that matter and that you can control. You cannot control the stock market, any attempt to do so will inevitably go wrong. In times like these, however unsettling, often the most positive action that you can take is to do nothing.”
Andrew Prosser, head of investments at InvestEngine, said: “Markets inevitably go through rough patches – whether caused by geopolitical instability, extreme weather events or economic tariffs – but people who invest in a diversified portfolio need to remember it’s about long-term returns rather than quick wins.”
Jonathan Raymond, investment manager at Quilter Cheviot, said: “Most clients have been through the Covid sell-off in 2020 and the 2022 equity market falls amongst other events and, in the main, are fairly immune to these sort of periods.
“Many are fully cognisant that these periods of volatility are the “price of admission” for attaining good returns over the medium to longer term and to protecting and growing capital in real terms.
“We have heard from a few clients, and I would say that it tends to be the less experienced and potentially younger clients who can become more unsettled, something I have put down to all of us being ‘plugged in’ 24/7 to social media and being able to get real-time updates from our phones.
“As always, we encourage clients to take a long-term view and often, times like these can provide good opportunities for those new clients or with cash earmarked for investment to take advantage of the volatility and that is something we encourage.”
Dan Coatsworth, investment analyst at AJ Bell, said: “One of the worst things people can do in the face of a market correction is panic and sell investments. Time in the market is more important than timing the market.
“History shows that markets often experience sharp pullbacks and then bounce back. While we don’t know when a recovery will happen, staying invested throughout has often proved to be the best strategy.”
Stock markets fell sharply at the end of the week in response to the new tariffs imposed by the White House.
A 10 per cent baseline import tax on goods coming into America from around the world kicked in on Saturday morning, while a 25 per cent levy on foreign cars came into force on Thursday.
Many nations will face even higher levies in the coming days, including the EU, which will see tariffs imposed increase to 20 per cent later in the week.
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