Australia's largest financial advice firm has responded to frenzy over a market downturn, saying investors should take a more defensive position on portfolios.
Professional Investment Services (PIS) said with the threat of further interest rate hikes, investors need to take a harder look at their money.
"Investors should look at a number of options to defensively reposition their portfolios," PIS chief Robbie Bennetts said.
Bennetts said the first step would be to consider any non-deductible debt.
"Look at your borrowings and see if you can reconstruct your home loan and your investments to take advantage of the tax deductibility of interest associated with investment loans," he said.
"Secondly, ensure you keep your gearing levels conservative," he said.
"Tax minimising may be important, however, it is equally important to consider the consequences if for any reason you are unable to meet your repayments."
Bennetts said it is important to avoid having to sell assets to meet loan repayments, especially if the market is at the bottom of an investment cycle.
The Australian sharemarket is continuing to suffer the fallout from the sub-prime mortgage crisis in the United States.
The downturn has prompted Australian banking and non-banking lenders to warn of an increase in interest rates in addition to the official Reserve Bank rise last week.
The Reserve Bank raised rates a quarter of a per cent last week to 6.5 per cent.
