'What's happening is that it made them reassess the relationship between risk and return. Whereas until the end of last year people were riding on a false sense of optimism about risk of return,' Melanie Nutbeam, director of international financial planning at ipac, said.

Investors and their financial advisers were re-evaluating risk tolerance to match their investment goals - whether it was a comfortable retirement, their children's education or wealth preservation for the next generation.

James Sun, managing director of Charles Schwab Hong Kong, said: 'When people come to me and say, 'I feel uncomfortable about my portfolio', I ask how uncomfortable they feel. They say, 'I can't sleep at night.' And I will right there tell them, 'You're taking too much risk'. I call that the sleeping indicator. It's time for you to rebalance and trim your portfolio and get into a less risky asset allocation.'

Rebalancing or fine-tuning portfolios could mean diversifying asset allocations in different sectors and markets, finding defensive investments such as stocks that are resilient to a global economic slowdown, or loading up on cheap but high-quality stocks.

The return may be more modest than the gains seen in the stock market rallies of last year, but investment advisers say it is the kind of strategy that will see investors through tumultuous times. Mr Sun said: 'This kind of market really tests you and tells you who you are as an investor.'

Some highly paid expatriates in the banking sector may face job insecurity because even big financial institutions have been among the biggest losers in the subprime crisis.

The demise of Bear Stearns in March, for instance, shocked the banking industry. Concern about similar situations happening may prompt some changes in their investment plans. Others may be convinced that selling out their stock portfolio and holding cash may be the best move.

Ms Nutbeam said: 'The biggest challenge for our clients is to stay on track with their financial plan, with the strategy that they've worked out, and to not follow the herd.'

Investment advisers warn against bailing out from the stock market when it is down because by exiting, investors can miss the opportunity to gain when the market bounces back.

Ipac research says that the biggest returns after a bear market come in the first few months after the market hits bottom. The problem is it is difficult to predict the bottom until it has passed.

Mr Sun said: 'Normally this type of investor will come back to the market after the market has already come back and picked up. So, in the long run, this is very bad timing - you sold when the market was down. You buy it back when markets pick up. You lose this opportunity to gain and then over the long run it would dramatically reduce your overall investment return.'

Investors are also concerned about biting inflation in Asia. Ms Nutbeam said some clients came for budgeting advice. How much should they spend in these difficult times? Should they save as much as they can or would it still be okay to buy that dream yacht, for example?

'They're trying to determine what the balance should be between savings and spending. And I think that's very important in Hong Kong because we're seeing interest rates going down but inflation going up so the rate of return has shrunk,' she said.

Parking cash in bank accounts in anticipation of higher interest rates may be appealing to some. But Alex Boggis, director of Aberdeen International Fund Managers, said in the long run, investing in stocks brought higher returns.

'Equities are the only defence against inflation because they benefit from inflation depending how much you pay for them, where you are and the sentiment,' he said.

Mr Boggis forecast a 'difficult' year ahead in the equity market. 'We're going to see more pull-back over the course of this year and probably into next year,' he said.

But, he said, investors should look at Asian companies with strong fundamentals to add to their portfolios.

'The bear brings opportunities. You can invest anytime now if you're a long-term investor, but I'm sure there are better times later this year. Buy or hold and wait and you're going to do very well.'