- Tips for navigating the year ahead from five of HL’s investment experts.
- How to manage the emotional rollercoaster of a volatile investment market.
- Over the long term, it pays to be invested in the stock market.
Robert Farago, head of strategic asset allocation, Hargreaves Lansdown:
Stay humble – and stay invested.
“At this time of year, we receive investment outlooks for the year ahead from many of the world’s finest investment thinkers. Their forecasts are backed up by detailed analysis, convincing charts and a compelling narrative. The problem is they don’t agree with one another. Some think the exceptional performance of US companies will continue, others argue that exceptionally high valuations will weigh them down. Most argue that growth is set to remain robust but a few point to signs of a looming recession.
After 37 years of investing, my resolution is to remain humble about my ability to predict the future. Don’t double down on yesterday’s winners. Don’t get scared out of markets by the sirens predicting the next great depression. Understand that investing offers you a long-term return above cash – in return for accepting the risk of losing money in the shorter term. So stay invested but diversify across different sources of risk and return.”
Derren Nathan, head of equity research, Hargreaves Lansdown:
Listen to others but trust yourself.
“With around 55,000 listed equities globally across every conceivable sector it’s impossible to know everything about everything. So, it’s important to seek expert opinion if there are knowledge gaps to be filled. A pharmaceutical analyst may have great oversight of the biggest market opportunities yet to be addressed, but it may require scientific knowledge to judge which experimental drugs have the potential to become the leading blockbuster in that field.
It is sometimes hard to know who to trust. That’s where a broader view comes in handy. It also helps to add context to an investment case. For example, the strapline ‘most profitable coal mine in the world’ may sound appealing. But if coal is going out of fashion, then perhaps that’s not a pool to be fishing in. If after you’ve heard it a few times and you still have a nagging doubt, stick with your gut feel. If something sounds too good to be true, it doesn’t mean it’s not, but you’ll want some very strong evidence to be convinced otherwise.”
Joseph Hill, senior investment analyst, Hargreaves Lansdown:
Think about reinvestment risk.
“Over the last few years, investments like money market funds have become increasingly popular with investors, offering yield for a low level of risk. However, as interest rates fall, as they are expected to in 2025, this exposes you to reinvestment risk – the risk of missing the upside because you’re out of the market.
Equities generally perform well when rates fall. So, waiting for rates to come down before switching from cash or cash proxies back to the stock market will likely mean you miss out on the rally. Remember, over the long term, it pays to be invested.”
Tara Irwin, senior ESG analyst, Hargreaves Lansdown:
Build resilience into your portfolio.
“If 2024 has taught us anything, it’s that the world is increasingly unpredictable. Remnants of COVID-19, escalating trade tensions, and extreme weather events have exposed the financial risks of disrupted supply chains, damaged infrastructure, and operational delays. These issues can erode company revenues and investor returns, so my resolution is to prioritise investments in companies that are future-proofing their operations – strengthening supply chains, safeguarding transport routes, and adapting operational hubs to withstand climate and geopolitical risks.”
Hal Cook, senior investment analyst, Hargreaves Lansdown:
Don’t try and be too clever.
“Stick to your original plan – markets can move quickly and it’s easy to get carried away. Set a plan for an investment before you invest and then stick to it once invested.”
