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    Is the new year a good time to consider your investments?

    With a fresh year underway, it could be the perfect time to review your investments and consider if there are any adjustments you should be making given the current challenging financial market.

    With huge amounts of uncertainty due to various reasons including the cost-of-living crisis, recession and the ongoing crisis in Ukraine, it can be tempting to make changes to your investments or look to withdraw them out of fear. However, as the well-known golden rule of investment states, “time in the market beats timing the market!”.

    What should I do?

    Although often difficult, it is important to ride out a negative market cycle where possible. There may be circumstances where access is unavoidably required, but investors must generally hold their nerve and remain focused on the long-term objectives.

    If an investor finds themselves in a phase of accumulation, ongoing investment contributions benefit from market volatility as, when markets fall, investors can often buy more units for their money. Regular investors can benefit from pound cost averaging to potentially smooth out market volatility. Fewer units are purchased when prices are high, but more units when prices are low.

    Investors who find themselves in a decumulation phase (i.e. those who are accessing their portfolio) must be ready to play the waiting game as it is typically better to ride out market cycles rather than try to time them. Those who exit the markets temporarily could find themselves buying back in after markets recover, which can be risky.

    If you are close to, or have reached your de-cumulation phase, you should hold a contingency fund to ensure any capital requirements can be satisfied from cash, rather than risk selling down part of an investment portfolio at a bad time. It is also important to consider retaining cash to provide the liquidity to fuel ongoing income requirements for a set period, reducing the risk of having to sell down for liquidity purposes during periods of volatility.


    Investors should remind themselves why they are investing, have a plan in place and bravely ‘ride out’ a difficult market cycle – holding cash for contingency and shorter-term liquidity can help with this.

    Meanwhile, diversification across assets is also important to ensure you have a portfolio capable of withstanding a negative market cycle. This means including assets which are likely to do well during economic growth, but also some that are likely to do better in difficult times. It is usually a good idea to include a broad mix of equities, bonds and some alternatives. It may also be wise to consider a variety of sectors and themes too.

    Get in touch

    As always, every individual situation is different, and it is vital to get advice based on your exact circumstances when considering any type of investment. PM+M’s Managed Portfolio Service, is a bespoke investment portfolio produced by us, and managed in collaboration with AJ Bell, to make your life easier. At PM+M, we are currently having a rethink of our house asset allocation (blend of investments) and will shortly be implementing these changes for our clients as we plan forwards for them.

    If you would like to discuss your investments in more detail, or need some tailored advice specific to your situation, please get in touch by emailing or by calling 01254 679131.

    The value of investments can fall as well as rise. You may not get back what you invest.

    The information contained within this article is for guidance only and does not constitute advice which should be sought before taking any action or inaction.

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