The experts’ guide to surviving a stock market meltdown

INVESTORS watching in horror as the value of their pensions and investments plummet will be wondering what on earth to do.

Here, Money Mail has asked eight influential experts who have invested through previous crashes to share their top tips on surviving the coronavirus pandemic-hit stock market.

CHOOSE COMPANIES TO WEATHER A STORM

Jason Pidcock, head of strategy, asian income at Jupiter asset Management

THIS is my fourth market crash and while all crashes are different, they all instil panic. Irrationality is a common side effect of a crash. But in the short term there’s no point in making any predictions.

We choose to invest in strong companies that we believe can weather the storm. I look for those with strong balance sheets. I also look for firms with a competitive advantage and the best example of a particular type of company in a given sector or geography.

BEAR MARKETS DO NOT LAST FOREVER

Mark Mobius, founder of Mobius capital Partners

I’VE just finished some research on the average time that a bear (or falling) market lasts from the peak to the bottom. Many people think it’s the peak to the next peak. But the bull market starts from the bottom. The average is 1.7 years, sometimes less. Global markets have been through some incredibly rough times and recovered. This is no different. Investors must take stock and stick with funds and companies that can be relied on to make a good recovery.

RECOVERY IS USUALLY QUICK

Paul MuMford, author of The stock Picker and fund manager at cavendish asset Management

THE current fall in stock markets feels like 1973 when we had double-digit inflation and interest rates, food hoarding and a three-day week plus strikes and civil unrest. Having seen many crashes, there’s a clear pattern that markets over-react to events and usually recover before the worst is over. The good news is that recovery is quick.

BE BRAVE AND BUY CHEAP STOCKS

ros alTMann, ex-investment banker and former pensions minister

ONCE policy measures start being put in place to alleviate the pain of a market crash, it is usually a signal of a good time to start thinking about buying. When investors panic and sell shares as markets are collapsing, they often sell indiscriminately and the good companies fall in price, too, which offers a better buying opportunity for long-term investors.

DON’T PANIC AND HAVE A FIRE SALE

lord lee, the first isa millionaire and author of Yummi Yoghurt: a first Taste of stock Market investment

IT’S far too late to sell your investments. You will simply make your paper losses a reality. One of the biggest lessons in investing is to avoid the temptation to chop and change stocks.

Stay put for bigger longer-term recovery. It’s true of investment funds, too.

DRIP FEED MONEY INTO INVESTMENTS

Tom Stevenson, investment director at fidelity Personal investing

IT is very difficult to time trades, buying or selling, in a bear market, and indeed any market. Investors are better off establishing a regular savings habit where you drip-feed your money into your investments. It ensures you benefit from pound-cost averaging — where you buy more units in your investments when prices are low.

PREPARE FOR THE UNKNOWN

Paul niven, fund manager, f&c investment Trust

THE past may offer some guide to future events but, in the case of the current downturn, there is no reliable playbook.

Economists have been furiously downgrading forecasts, with suggestions of 25-50pc declines in quarterly US GDP among the most aggressive estimates. Nonetheless, the pace and extent of change suggest that others may soon catch up with these numbers. There’s little doubt that the global economy will endure a serious, but hopefully short-lived, recession.

HOPE FOR A LARGE REBOUND

alex bruMMer, daily Mail city editor

HISTORY suggests that the deeper the crash, the larger the eventual rebound. And, that over a century, shares always outperform other asset classes such as gilts and cash. Covid-19 is different because the origins are epidemic related rather than market related. What’s encouraging is how quickly China has started to return to normality with shops reopening, so once the peak is passed the economy and markets should bounce.