IFAs must urge investors not to chase flavour-of-the-month sectors such as property without looking at the bigger picture, says The Money Portal.
TMP is concerned that investors are continuing to shun equities in favour of sectors it says are often at their peak, slowing or lagging behind other asset classes. As an example, it says from March to November, the FTSE All Share rose by 27 per cent while the Halifax house price index was up by less than 13 per cent.
It says investors are continuing to plough cash into property through direct or collective purchases. It believes the problem remains the delay between a sector's upwards shift and investors' reaction.
The answer, says TMP, is for IFAs to educate and advise clients on the importance of a strategic and balanced portfolio in addition to recommendations about where to invest.
Managing director Richard Craven says: “The problem is that investor focus shifts from one sector to another, favouring the latest and greatest, with little regard for a strategic and balanced portfolio. We have to educate and advise clients on the bigger picture and actively highlight all factors in deciding where to invest.”
Plan Invest joint managing director Mike Owen says: “With interest rates going up, equities do look a better investment. Investors who made the move to equities from property at the start of the year -a big call – have turned out to be very shrewd.”