Unless you have been locked away on an island without any form of media since mid-February then you would be very aware that markets around the world have been volatile and in panic mode. This affects all of us in various ways, some people more than others.
For me to tell you to ignore the noise even though I know that is the best thing to do, would be foolish because I realize that is impossible. What really matters though is what we do with the noise. We need to have good filters and understand that the media only sells when there is noise and when the noise is magnified.
Some of the things that we should and shouldn’t do during scary market times are:
- Don’t take advice from journalists, media or anyone who doesn’t understand your personal situation.
- Your portfolio should be designed and structured with your needs in mind and should always be appropriately diversified
- Do not beat yourself up about decisions that you could have and should have made because hindsight is perfect vision, and everything seems obvious after the facts
- Understand that market timing is all but impossible to get right consistently enough to add value and often, it damages portfolios
- Make sure that your portfolio is rebalanced and that there is a process around this that is well though through because it removes emotional decision making from investments
We understand these issues well and construct your portfolios accordingly. This doesn’t mean that the portfolio doesn’t dip in value during times like this BUT what it does mean is that it is well positioned to bounce back nicely when markets turn and the level of risk within your portfolio is tailored specifically based on your personal needs.
If you would like to discuss this or any other issues around your personal finance, give me a call on (02) 8821 7090
© Martin Morris