Recent volatility in the world investment markets can cause a lot of unnecessary anxiety for investors. At such a time, risks can be taken causing the loss of long-term, well earned benefits. Market downturns are inevitable and it is impossible to predict movements accurately.
Moving in cycles
It might be tempting to move money out of the share market during times of volatility or weakness. However, markets move in cycles that are often unpredictable. Historically, recoveries follow downturns and vice versa. Being in the market at the time of recovery is important.
Go for quality
Diversification of your portfolio will help to protect you against downturns. Whilst one asset class might perform poorly it can be balanced by another that performs well. The underlying quality of investments should not be judged by short-term ups and downs. Volatility often reflects the panic of millions of impatient investors. Waiting for short-term fluctuations to subside helps to identify quality investments and enables them to produce better returns.
Consult your licensed financial advisor at Saward Dawson Financial Services who would be pleased to review your investment plan to see if changes need to be made. It may be time to change your portfolio but it should be done in conjunction with careful thought and advice.