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What are you advising clients as markets go into meltdown?

Journalist: John Choong (Head of Markets and Research), Newspage

ended 05. August 2024

Financial markets are in turmoil this morning on the back of a weaker-than-expected jobs report stateside and the Bank of Japan raising rates last week. Investors and traders alike have instigated a massive sell-off.

NASDAQ futures are currently down 4.5%, while the Nikkei has effectively wiped out all of its 2024 gains in under a week, as the Japanese benchmark plunged a huge 12.4% in a day. Several other markets such as the South Korean and Taiwanese markets were also heavily affected with authorities having to stop trading at one point.

As such, the Federal Reserve is now rumoured to be contemplating a 25bps emergency rate cut this week, with the bond market pricing in a 60% chance of this happening.

Amid all this carnage, what is your advice to your clients and what asset classes should investors consider if rates do get cut more sharply? Also, have you had concerned clients calling you this AM? Any insights or anecdotes, send them across ASAP as this story will be issued to media in the hour.

2 responses from the Newspage community

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Joshua GerstlerVerified
Chartered Financial Planner at The Orchard Practice
The first thing to remember is to stay calm. If you make a decision based on your emotions then you are more likely to make the wrong decision. If you portfolio has been designed to expect and cope with volatility in the market then you can sit back and relax whilst others are panicking. If your portfolio is not designed to cope with volatility, and if you are feeling stressed at this time, then in all likelihood you have the wrong portfolio for your comfort levels.
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Philip DragoumisVerified
Director and Owner at Thera Wealth Management
It’s not all bad news. Bonds are going up, interest rates are going down, oil prices are falling, and gas prices are collapsing — all of which are helpful for the economy. If you are under 50, just keep calm and carry on buying. However, if you are heading up to retirement, not to worry. Speak to your financial planner — in all probability, everything is fine and you can still retire as planned. This is why we are here.