In short, the answer is yes. The only question is when? No one really knows and if they did, they would most likely be spruiking that they had picked the beginning as well. They’d also be very rich…!

If you have held your nerve throughout the hysteria and still remain invested, now is not the time to be selling. We are a lot closer to the end than the beginning and even with the benefit of hindsight if we choose to invest in financial markets, we must understand the risk of such declines exist.

Rather than trying to time markets, history has proven to us that staying over a long period of time provides greater returns. For example, $10,000 invested in the share market in 1978, would be worth almost $600,000 in 2007 - an average return of 14.7% a year. Throughout this period we experienced seven market corrections including the 1987 crash that saw the market fall by 43.5%.

I suggest now is the time to re-visit your strategy. Some key areas to concentrate on:

• What were the original objectives? Can they still be met based on the current environment?

• Do you understand what you are invested in? If you hold direct share investments, do you understand what the company does? If you own managed funds, do you understand how your money is invested and the result of others selling?

• Do you have a long term investment strategy in place? If investing in growth assets such as property and shares, a minimum time frame is no less than 5 – 10 years.

• Is your investment strategy diverse in nature? Diversification spreads risk and ensures that all your eggs are not in one basket.

• Are your investments underpinned by good and reliable dividends? As an example, at current values, Westpac Bank share dividend equates to an income return of 13% a year.

• What are you paying for the advice you receive and how much are your investments costing you? Do you pay fees or commissions to your Adviser.

• Do you believe you have control of your investments?
If you feel comfortable you have a handle on the points raised, I would suggest you are well placed to ride out and recover the current turmoil.

Statistics since 1900 show that markets are positive 87% of the time. After a negative year, on average markets recover within one year and then go on to achieve positive growth for the next three years or more.

The pattern for the last 108 has been consistent – positive years follow a negative year. I don’t expect this time to be any different.