Investors should pay more attention to the fundamentals of economics rather than follow the latest sensational headlines, according to investment experts from Barclays.

Speaking at a recent investment market outlook event held in the Isle of Man, Henk Potts, director of investment strategy for Barclays in the UK, said that while the global economy was clearly in the midst of a challenging period, overall it had performed well with strong fundamentals in support.

He said: ’The longest period of economic expansion on record coupled with surging geopolitical anxiety has clients questioning if this cycle is coming to an end. Indeed, it has encouraged some to hold off investing in risk assets or to reduce exposure.

’Risks always have and always will exist, but these should be actively managed based on the true market conditions at a given point of time.

’Certainly Brexit has caused a great deal of consternation but the really challenging aspect of that issue is the uncertainty.

’Uncertainty is not the friend of investors as it prevents proper analysis and complicates decision making.

’A persistent wave of negative headlines continues to disturb markets and against the backdrop of rising volatility and macro concerns, it is not surprising investors are cautious about if and when to increase their exposure to risk assets.’

Mr Potts noted that the key hurdle for investors to overcome is where to put their money to work and over what time horizon.

He referenced the Barclays Equity Gilt Study 2019 which shows the nominal performance of £100 invested in cash, bonds or equities between 1899 and 2018.

The study shows that £100 invested in cash in 1899 would be worth just over £20,000 today. If invested in gilts, the same £100 would be worth close to £42,000. However, £100 invested in equities in 1899 would now be worth around £2.7m.

’While the data provides compelling evidence of equities’ outperformance over 118 years, most of us have far shorter investment horizons. However, understanding the long-term risk/reward profile of different asset classes should help investors make a more informed choice,’ said Mr Potts.

The event also included a panel discussion with investment experts from Barclays and Asset Risk Consultants.

Niall Gaughan, Barclays head of investment management for the Channel Islands, Simon Smith, Barclays head of offshore investments, and Grant Wilson, chief investment officer at Asset Risk Consultants gave their thoughts on what investors should be thinking about when putting a portfolio together, their opinions on passive versus active investment management and the economic indicators investors should be considering when predicting a recession.

’In a period of escalating trade tensions, recession fears and elevated volatility levels, it is all too easy to forget the power of long-term investing,’ said Mr Smith.

’For long-term equity investors the most effective entry point has generally been when headlines are the darkest and markets are weak and cheap. Emotionally this is a difficult decision.

’Investors should not react based on emotion. Time in the market is far more important than timing the market and with so much noise and uncertainty it’s important that investors maintain their composure.’

Stuart Nelson, director at Barclays in the Isle of Man, said: ’Barclays is committed to providing our local investment clients with global expertise and insight that is tailored and relevant to them.

’It was great to have Henk back to present his investment market outlook along with Simon, Niall and Grant who considered some of the challenges and opportunities the markets are presenting at the moment and how local investors can successfully navigate them.

’We hope attendees found the discussion useful.’

Henk Potts speaking at the event in the island