Portfolio realignment in the current volatile market could destroy investors' wealth, HLB Mann Judd is warning its clients.
The firm was warning its financial planning customers to be extremely careful and measured in their decisions, HLB Mann Judd partner Michael Hutton said.
"If they have a portfolio with quality assets that's well diversified and if there's an appropriate allocation to each sector, then really what we're saying to them is they have to grin and bare it, sit tight and wait for the inevitable to happen," Hutton said.
In the time it took to sell an asset and buy another, the market could change substantially, he warned.
Panic-trading investors also risk being slammed with transaction costs, capital gains tax issues and missing out on dividends.
HLB Mann Judd had a significant number of clients who ploughed an extra $1 million into superannuation last year. Hutton declined to put an exact figure on the extra contributions.
"These markets are particularly hurtful for people who have put new money into the market," he said.
He said he was advising clients with large direct shareholdings to review their portfolios and ditch poor-quality assets.
HLB Mann Judd has only received a small number of phone calls from clients worried about market volatility.
