Consensus from industry figures this week following downgraded economic forecasts across Europe is that it will be increasingly hard to seek out growth and the spectre of recession will not disappear for years to come.
Alan Brown, chief investment officer at Schroders referred to Reinhart and Rogoff’s book This Time Is Different and said he was a big believer in their thesis that recoveries tend to be slow and protracted when recessions are created by problems at a global and systemic level.
In addition, even once western economies "get back to business as usual", Brown said there will be rising interest rates and tightening fiscal policies to contend with.
He said there are very few places for investors to hide from the economic storms we are facing at the moment and so it was best not to worry about volatility over the short term.
"Emerging markets may look better on almost all metrics, but they are still exporters and still volatile. So while the may be the place to be over the long term they are still risky in the short term," he added.
Well diversified, high yielding, cash rich equities are about as defensively positioned as you can be for the coming years, according to Brown.
Hugh Yarrow, manager of Wise Investment’s Evenlode Income Fund, said there is a risk the timeframe fund managers are given to prove themselves is getting shorter and shorter.
He launched his fund two years ago and has a substantial amount of his own equity in it, but is prepared to underperform the benchmark over the short term if his ultimate aims of capital protection and growth are achieved.
"I see this as a 15 to 20 year project," he said and I couldn’t disagree more with the idea of managing money on month to month basis.
"Managers are going to be under a lot of pressure over their performance for the past three months, the biggest edge we have is time patience," he added.
Another advocate of patience when it comes to investing is David Coombs, fund manager for Rathbone Unit Trust who looks after the multi-asset strategies they provide.
He said during volatile times when the market is see-sawing on a daily basis, it is important to stick with your convictions and only ditch a fund if the manager has proven to be fickle with his objectives.
"We try to hold to a minimum holding period of funds for three years. It is so easy to get trapped in short term performance. If a manager underperforms you have to allow them the time to prove themself."
