Mark Dampier, Head of Investment Research, Hargreaves Lansdown: “Contrary to reports, the fall in the Chinese stock market has little to do with the December PMI data coming in at 49.7 against a consensus of 49.8. 

It has far more to do with worries that major shareholders will reduce their positions after the ban of share sales and short selling which came in at the end of trading on Friday. Long term investors need to ignore much of this short term noise and make sure they have enough cash for everyday needs. Despite the seas of red, market falls should be seen as buying opportunities.” What should pension investors do? Tom McPhail, Head of Retirement Policy: “For those close to or in retirement, this market turbulence highlights the importance of maintaining a cash reserve and of not leaving yourself in a position where you have to sell shares today to provide an income tomorrow.

Plan ahead for any share disposals, ideally over a number of years, so that you can do so at a time of your choosing, when the market has risen rather than when it has just fallen. Drawing the dividends from a well-diversified portfolio as income is a more stable and certain way of providing a retirement income from shares. In the short term, if you were planning on cashing in shares in the immediate future it may make sense to defer doing so if you can, however there is no guarantee over when or how quickly share prices may recover.”

“For anyone still building up a pension, making regular contributions and investing for the future, today’s market movements may prove to be a blessing in disguise. This is an opportunity to buy investments at a lower price than last week. Once you start looking at investing over a period of decades, the stock market is almost certain to provide the best returns. Over an 18 year term, shares have an 88 percent probability of outperforming Gilts and a 99 percent probability of outperforming cash so keep investing and don’t panic.”