It’s Time to be a “Cautiously Optimistic” Investor
During the last few months, we have experienced a very turbulent market. The crash in May resulted in millions of dollars being lost in a flash, leaving many investors (especially those of retirement age) fearful and forcing them to flee. Of course, since then the market has recovered, but it is not where it needs to be right now.
What is my advice? As an investor, you need to be cautiously optimistic when it comes to playing the market today. The truth is, we may experience more downs than ups but if you diversify your portfolio by adding different asset allocation classes, you will more than likely be able to balance out your losses and gains. On the other hand, if you are of retirement age, you may simply want to put some money on the sidelines and re-enter the market when it is less volatile.
What you should be doing?
• Monitor the market’s activity. This week, for example, is critical to determining the market’s activity over the next few weeks. Major companies will be sharing their key earnings and lots of economic data will be coming out. Be prepared for the market’s reactions to them.
• Have an evacuation strategy. A few weeks ago, I talked about having an evacuation strategy, which means that you need to monitor the market indicators and put your equity into a fixed income or cash when the market is high. This may also be a good time to consider cashing out your investments.
• Look at what things are going to make you money. Review your portfolio and consider adding non-correlated assets to your portfolio. These classes include a range of potential investments, including real estate, private equity and commodities, etc. These investments can balance the risk of a traditional portfolio that consists of stocks, bonds, etc.
What is your strategy? How are you managing your investment portfolio during this market period? Share your ideas and questions.
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