The most severe correction of the last two years on our stock market has; What advice do fund managers have?

Our stock market is experiencing the most severe correction in the last two years, after a massive increase in indices starting from mid-2023, a period in which the BET-TRN index, which reflects both the price evolution of the twenty most liquid stocks on the Stock Exchange Valori Bucharest (BVB) as well as the reinvestment of net dividends, had an advance of 51%.

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Fund managers in our country urge investors not to react emotionally to higher market volatility and to take a long-term perspective, given that historically, stocks, which reflect the evolution of the economy, have always recovered and outperformed decreases, according to the opinions expressed yesterday, during an event organized by the Bucharest Stock Exchange and the Association of Fund Managers in Romania (AAF).

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Money managers also stressed the need for proper allocation of portfolios between asset classes, which balances potential returns with risks, and that episodes of high market volatility can represent times when investors buy financial assets at lower prices.

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According to managers, it is likely that after this year's elections, tax increases and other fiscal measures will appear in our country starting from 2025, but whose impact on share prices is difficult to quantify.

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Overall, given the exceptional performance of BSE stocks over the past year and a half, developments are expected to moderate further and widening performance discrepancies between sectors and companies. But a long-term, diversified approach with a horizon of at least three to five years and steady investment in quality companies is the solution to navigating episodic market turbulence, according to money managers.