Royal Bank of Scotland (RBS) advises investors to “sell everything,” predicting a “cataclysmic year” where stocks could fall by a fifth and oil could hit $16 a barrel. However, other experts argue that panic selling can often be the worst strategy and that a ‘hold everything’ approach can be more beneficial. Veteran investor, Terry Smith, believes selling in a downturn can be disastrous, as investors risk missing out on the upturn that invariably follows.
RBS’s bearish outlook is not shared by all. For instance, Laith Khalaf, a senior analyst at Hargreaves Lansdown, suggests that the bank’s advice is extreme. He argues that timing the market is near impossible, and investors are usually better off staying invested for the long term.
Investors are advised to diversify their portfolios and not put all their eggs in one basket. This involves spreading investments across different asset classes like bonds, shares, property, and cash. This strategy can help to smooth out the returns, as when one asset class is performing poorly, another may be doing well.
In summary, while some predict a gloomy outlook for the financial markets, others advise against panic selling and suggest maintaining a diversified portfolio as a more prudent strategy.
Go to source article: http://www.telegraph.co.uk/finance/personalfinance/investing/12101740/Time-to-sell-everything-No-this-is-when-a-hold-everything-strategy-works.html