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Finding Calm in the Chaos

Insights

In times of market turbulence, it's crucial for investors to maintain a level head and avoid making rash decisions. Here are three effective ways that we use to help manage your portfolio during chaotic periods without resorting to panic selling:

1. Rebalance Your Portfolio

We use regular meetings and reviews to monitor and adjust your strategic asset allocation to ensure that market growth has not resulted in risk creeping into your portfolio.

Assessing your current asset allocation

  • We assess your current asset allocation in terms of current market conditions.
  • We compare that to the strategic allocation that we developed together to help you reach your short term and long-term goals.
  • We regularly adjust your portfolios by shifting growth and profits to the appropriate part of your portfolio.

While markets are fluctuating, your portfolio is likely still near its peak, making it an opportune time to realign with your risk tolerance and objectives

2. Investment Diversification

A diversified portfolio can provide you with a smoother experience and reduce the potential risk of significant downsides.  As part of your review process, we pay special attention to having broad diversification this ensures that we: 

  • Spread investments across various geographies, asset classes, industry sectors and by management style.
  • Avoid overexposure to any single market segment.
  • Refrain from extreme positions or binary decisions, like moving entirely to cash.

A well-diversified portfolio can help mitigate risks associated with market uncertainty.

3. Plan for Future Spending Needs

Prepare for your upcoming financial requirements:

  • If your plan has income requirement, a part of your portfolio is allocated in lower-risk investments to provide you with your anticipated needs in the next 1-5 years
  • If you are near retirement, a part of your portfolio is similarly allocated to be ready for your retirement.
  • Most of our clients have some form of liquidity built into their investments.

This approach ensures that we are not forced to sell investments at inopportune times.

Key Market Insights

  • Market Unpredictability: Short-term market movements often defy logic and expert predictions.
  • Long-Term Perspective: Historically, investors who adhere to their strategies through various market cycles have built wealth despite volatility.
  • Global Exposure: International diversification reduces a portfolio’s dependence on any single economy.

Maintaining Emotional Balance

Instead of making drastic investment changes driven by fear, consider:

  • Sticking to your long-term investment strategy.
  • Focusing on your financial goals rather than short-term market noise.
  • Talking to us.

Remember, it's not the market situation itself that affects you, but your response to it. You have the power to decide how to react.

By following these strategies and maintaining a calm, rational approach, you can navigate market turbulence more effectively. Plus, your team is here to help you through challenging times and to support you in reaching your long-term financial goals.  If you, a family member or friend can use some calming advice about market volatility, please give us a call.