INVESTING IN A WORLD OF HIGHER RATES

Despite recent volatility you shouldn't panic and instead remain patient and diversified say experts

By Steven Frazer

Editor

It has been a tricky couple of weeks for investors. The higher or lower speculation over interest rates, particularly in the US, has changed so rapidly it can make you feel like a contestant on Bruce Forsyth’s Play Your Cards Right.

The collapse of Silicon Valley Bank and New York-based Signature Bank in quick succession, and more recently, a UBS (UBS:SWX) rescue for Swiss banking giant Credit Suisse (CSGN:SWX), has left investors’ nerves frazzled and sparked worries across global share markets.

Oil prices have slumped, gold is soaring, bond yields have fallen and so have stock markets. The FTSE 100 has lost about 9% since the SVB threat emerged on 8 March, and hundreds of billions of market value has been stripped from global banks.

How investors handle the inherent risks of an iffy economic backcloth and the volatility it will likely bring could make a big difference to portfolio performance over the months and years ahead. If interest rates do stay higher for longer, what should investors do?

As is often the case in uncertainty, dull is usually sensible – don’t panic, be patient, stay invested in a diversified asset pool, and steadily and systematically put money to work at what, in due course, could look like attractive market levels.