Each fortnight, Reach Markets brings you access to some of the best fund managers from around the country to share their views on markets and investing.

In the past few months, we’ve asked some of those fund managers for their tips on how to best navigate the current market environment. Here is what they said. 

Be aware of what you don’t know

Dean Fergie, Cyan Investment Management

Being a professional investor is a privilege that affords its lucky cohort access to information and contextual knowledge many retail investors never have, Cyan’s Dean Fergie told Reach Markets.

Even then, though, Mr Fergie is quick to point out that not even he thinks he knows everything there is to know about markets and the companies that comprise them.

That’s not itself something to worry too much about, however. Instead Mr Fergie said investors need to understand where gaps in their knowledge are and understand how to appropriately manage them.

“Be aware of what you don’t know,” Mr Fergie said.

“And following on from that, if things don’t start going the way you planned, be very up-front about cutting those wrong decisions.”

Mr Fergie said one of the “emotional shortcomings” investors must contend with is learning to walk away when things don’t go according to plan.

“You just don’t want to admit you were wrong, so you hang on to positions that don’t do well,” he said.

“I don’t think you should hang on to losing positions, and in my experience that’s one thing investors don’t do very well.”

Be consistent with your investing

Joseph Constable , H&G Investment Management

The constant stream of news and market noise has created an environment where it is becoming harder and harder to stay calm, according to H&G Investment Management’s Joseph Constable.

Even so, staying calm and ignoring the ‘fear of missing out’ (FOMO) and hysteria that have become endemic to markets is crucial to success as an investor.

To that end, Mr Constable said investors – especially those without professional experience – need to be consistent with their investing, avoid trying to time markets, and stick closely to their investment thesis.

“When you’re in a calm position, work out what you think inherently your strategy is,” he said.

“Try as much as you can to keep that idea in the back of your mind and stick to it.”

That’s not to say change should always be avoided. Mr Constable noted that if something happens that “dramatically” changes what investors believe markets are doing, it’s prudent to reconsider their strategy too.

But even then, investors should be careful to cut out the market noise as much as possible.

Be cautiously optimistic

Andrew Chapman, Merchant Group

Investing goes awry when investors get the little things wrong, Merchant Group’s Andrew Chapman said.

“It’s all the basics that people don’t do – you’ve got to not have all your eggs in one basket, you have to spread your risk,” he said.

Investors need to weigh all these considerations up when dabbling in markets, Mr Chapman said, noting that the Merchant Opportunities Fund he manages buys small, mid and large cap companies for this exact reason.

“You have to balance out your risk/return, what you’re trying to achieve, how long you’re investing for – all those sorts of things,” he said.

“But be cautiously optimistic, would be the short answer.”

Be mindful of China’s woes

Samuel Berridge, Perennial Partners

It’s no secret that China’s property market woes are creating choppy conditions for investors, especially for resources and commodities that rely on Chinese consumption. 

Perennial Partners’ Samuel Berridge said while investors need to keep an eye on the Chinese property woes, the Chinese government has responded to property market “wobbles” to ensure there isn’t wider market contagion. 

“I think we’re in a situation of bad news is good news as far as China property is concerned”, he said, with any spike in insolvencies likely to be met with increased stimulus measures. 

Longer term, Mr Berridge said decarbonisation will be the trend to watch within the resources and commodities space. 

“This decarbonisation thematic isn’t going to turn around; I can’t see a scenario where it does, so it’s important to keep sight of that if we do run into short-term volatility on China’s worries.”

Join our next session of The Insider: Meet the Fund Manager to hear fund managers talk about their favourite stocks, investment strategy, market insights and more. There will also be an opportunity to ask questions during the session. To book yourself in, click here.

Reach does not assume responsibility for the accuracy or completeness of any information provided, and the views expressed are not reflective of Reach Markets’ position