It is not difficult to find 40 to 60 good ideas in global equity markets – there is no justification for being excessively concentrated.

9.     Vet the debt

Companies with lots of debt are vulnerable if interest rates rise and the economy falters.

Interest can be an enormous drain on cash flow. We check balance sheets and company accounts intensively.

Fortunately, a lot of modern companies do not need as much plant and capacity as they used to, even in the growth phase. They invest in intangibles, like design and branding, rather than machinery and buildings.

Without financial leverage, they are more robust.

10.   Look for moats

Seek out companies that are well fortified and can look after themselves in difficult times.

It might be that they have built a globally recognised brand or have technology that no-one can match.

They do not have much competition nibbling at their profit margins in a downturn and they can raise prices if inflation strikes.

Conclusion

It is impossible to time equity markets perfectly, so it makes sense for clients to remain invested and to ignore the constant doom and gloom headlines that might make them panic.

That does not mean your investment manager cannot reduce their risk.

History is no guide to the future, but following these 10 rules has, in my experience, helped save investors around 20 per cent of any downside, and left them better positioned to enjoy a recovery.  

Simon Edelsten is manager of the Mid Wynd International Investment Trust and Artemis Global Select fund