Time to review investments says expert

The recent news that profit warnings from UK listed companies are running at record levels should not put off individual investors - rather is a timely reminder to look at where their money is held says one financial expert.

Dr Kate Warne a market strategist with Edward Jones comments; “Corporate earnings growth in the UK has been above average over the past few years and in general companies are indicating earnings are still growing, albeit at a slower pace. This suggests the trend in rising share prices should continue, but we expect volatility is likely to increase in the market.

"We suggest investors use these warnings as a sign to review their portfolios. No one can predict the stock market from day to day; prudent investors are prepared for all types of markets.

"If earnings growth slows more than expected, which could happen, share prices could decline. It should be noted, however, that declines are difficult to predict, and time in the market is more important than timing the market. Investors can better prepare for declines by owning quality shares and diversifying their holdings.

“Global economic growth has been strong due to low interest rates world-wide and other favourable conditions. However, we are seeing signs that this situation may change.

“While riskier investments could continue to perform well, in many cases we believe the risks of poor performance are increasing.

"We suggest investors reduce the risk in their portfolio by getting out of investments such as high-yield bonds and emerging markets and diversifying using gilts, investment grade corporate bonds or mutual funds that invest in gilts and high quality, dividend paying shares.”