Whipsawing markets have been testing investors’ patience and confidence. Are you holding your nerve?
Many strategists have advised a risk-off stance, and have told investors to refrain from buying the dip. Yet a strategy of dollar-cost averaging is the mainstay of those saving for a long-term goal such as retirement.
Investing a fixed sum at regular intervals automatically buys more shares when prices dip, and fewer shares when markets rise. Is this strategy off the mark, especially in a crisis? It may not always feel so, but financial history is on the side of risk-taking.
“Among private clients, there is also a strong appetite for structured products with downside protection” – Franck Fayard, Head of Marex Financial Products, APAC.
Marex designs customisable structured products using derivatives. Capital-protected notes, called minimum redemption notes (MRNs), consist of a zero-coupon bond and an option. It is best, however, to invest in MRNs before volatility spikes, he added.
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