The Thai Financial Planners Association (TFPA) advises investors to adjust their portfolios during market volatility over the next 3-6 months by reducing exposure to high-risk assets, increasing holdings in high-liquidity assets, and favouring Chinese equities over US stocks.
Wirote Tangcharoen, chair of the association, said the market turbulence is primarily driven by trade conflicts stemming from steep US tariffs. This uncertainty will likely persist until there is a resolution via trade negotiations, causing global financial markets to remain volatile over the coming months.
"We suggest reducing allocations to high-risk assets such as equities, and increasing weight in Thai bonds. Investors should also diversify internationally, with a focus on Chinese stock markets, which still have monetary tools and stimulus measures to boost domestic consumption," said Mr Wirote.
China still has room to cut interest rates further from the current level of 3-3.25%, with more domestic consumption stimulus expected, he said. In contrast, the US equity market is likely to trend downwards due to rising tariffs, which could dampen consumer spending, said Mr Wirote.
Given the heightened market volatility, investors are urged to adopt strategic portfolio diversification and make necessary adjustments to match current conditions. Failing to do so even for long-term investments could result in significant losses, he said.
TFPA said financial and investment planning is more crucial than ever because of geopolitical and trade war-related factors, as well as the increasing frequency and severity of natural disasters, such as earthquakes, that could impact Thailand's already slowing economy.
"Over the past 5-6 years, events such as the pandemic have underscored the importance of emergency savings, while personal financial planning is no longer a distant concept," said Mr Wirote.
Salaried employees are recommended to save at least six months' worth of salary for an emergency. For freelancers, the guideline is 12 months' worth of living expenses. Even in post-crisis periods, maintaining an emergency fund remains vital, he said.
The recent large earthquake in Thailand on March 28 raised awareness about the need for property insurance for both houses and condos, as well as life insurance, particularly for primary earners in families.
"Everyone who earns an income should engage in financial planning, as all aspects of life from birth to death require money, including childbirth expenses, tuition, buying a home or car, getting married, raising children, and retirement," said Mr Wirote.
Moreover, there are unpredictable events such as illness, accidents, and job or business uncertainty, all of which incur financial costs, he said.
The cost of living continues to rise, especially housing prices. According to the Bank of Thailand's housing and land price index, prices have risen 28-46% on average over the past decade.
"Because money is limited, everyone who earns an income needs a solid financial plan to achieve financial goals, ensure life stability, and attain financial freedom and wealth. Financial planners can help build roadmaps for each stage of life to reach those goals," said Mr Wirote.