However, given the improvement in market sentiment in recent weeks, some investors are beginning to think the potential rewards on offer may justify the risk.
Here are five stocks that such investors may wish to consider for their portfolio.
Close Brothers
Thomas Moore, manager of the Standard Life Equity Income Trust, holds this bank in his portfolio.
"It’s a good counter-cyclical bank. By counter-cyclical I mean they are proud of lending more now while everyone else is reducing their lending. Plus, it’s provided year-on-year yield growth, and it’s currently yielding nearly 6 per cent," he explained.
"It’s a company with potential for growth that isn’t dependent on the macro environment."
Performance of stock year-to-date
Source: FE Analytics
Data from FE Analytics shows that only one fund in the IMA universe holds the company in its top-10, and that is Aberdeen UK Mid Cap, a top-quartile performer in the IMA UK All Companies sector over 10- and three-year periods.
Legal & General Group
Moore also likes Legal & General Group. He has a 1.6 per cent overweight in the company, which he describes as a very well-run business.
According to FE Analytics, it is one of the most-bought stocks by fund managers in the past three months. Our data shows it has risen 41.54 per cent in the year-to-date, while the FTSE All Share is up just 11.33 per cent over the same period.
Performance of stock year-to-date
Source: FE Analytics
The group was recently revealed as a key player behind the "shareholder spring", which has seen large companies held to account by stockholders over executive pay and corporate governance issues.
St James’s Place
FE Alpha Manager Daniel Nickols is overweight financials relative to the sector average in his Old Mutual UK Select Smaller Companies fund, which has returned 375.76 per cent to investors over 10 years.
He told FE Trustnet he is a big fan St James’s Place: "It’s an exceptionally well-run business that has become very strong in the medium high-net-worth sector of the market."
The stock has been quite volatile in recent months, according to data from FE Analytics, but it is up 17.61 per cent this year and 74.75 per cent over three – its returns in the latter period were twice those of the FTSE All Share.
Jupiter Fund Management
Nickols also picks Jupiter Fund Management as a dependable play that has performed well despite difficult market conditions.
"The fund flow that it is seeing has been consistently positive under difficult market conditions," he commented.
The company reported strong net inflows in August and said it had paid down £33m of debt, but it was the policy announcements of last week that really gave it a boost. Shares have risen 19.1 per cent since 5 September.
SVG Capital
Nickols holds this private equity group – previously Schroder Venture Group – believing it to be a well-run company at an attractive price.
Data from FE Analytics shows that the group was hit hard by the financial crisis, losing almost 90 per cent after markets slumped.
Performance of stock vs index over 5-yrs
Source: FE Analytics
It is up nearly 40 per cent in the year-to-date however, and Nickols, who is bullish on global growth, thinks it has a promising future.