Investing in stock markets is cyclical and one year’s winners can quickly turn into the next year's losers. Particularly when markets are volatile like today.

After the financial crisis, global stock markets rocketed due to record low interest rates and endless fiscal and monetary stimulus.

High risk asset classes made incredible returns, with investors making fortunes on everything from Tesla to Bitcoin.

The once-in-a-lifetime era of cheap money is now over. Central bankers and politicians got carried away with the stimulus, and we are all paying the price in the shape of rampant inflation.

This has forced policymakers to hike interest rates and tighten policy, deliberately engineering a global recession in a bid to crush consumer price growth.

We are all paying the price, as are Isa investors who bought stock and shares funds to build wealth for their future. 

Some are paying a higher price than others. Especially those who invested in the Baillie Gifford American Fund.

This time last year, it was the third most bought fund in the entire UK, according to online platform AJ Bell.

Private investors threw money at the fund as it rocketed in value, in the hope that its impressive performance would continue.

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Baillie Gifford American is effectively a tech fund, even though it does not say so in the name. Its managers took massive bets on this high-risk sector and loyal investors have paid the price.

Yet Khalaf said the bigger picture is brighter. “Baillie Gifford American’s strategy has been more rewarding over the long term, with the fund up an impressive 321 percent over the last 10 years.”

He said it seeks to pick out the big winners of the future, and invests in a relatively concentrated portfolio of stocks.

“It’s a high-octane approach to investing, and can be expected to bring both highs and lows. 2022 definitely falls into the latter category,” Khalaf said.

Investors should resist the urge to sell shares and funds now as that means crystallising this year's losses, said Richard Hunter, head of markets at Interactive Investor. "Next year could be a lot better."

James Budden, director of marketing and distribution at Baillie Gifford, said the management house is sticking to its investment process. “It’s important not to be distracted from a tried and tested approach by short-term market noise.”

Budden added: “We acknowledge that recent volatility has been painful for investors, we seek their patience and ask to be judged on a five or even 10-year view.”