In the immortal words of the late Yogi Berra: "It's like deja-vu, all over again". He could well have been referring to equity market performance over the last six months. The point being simply this: we've been here before.
Furthermore, the important points to keep in mind regarding how to navigate your portfolio through such times haven't changed either.
In an October 2008 article, I stated "If you have at least a seven year investment horizon and you are comfortable with your equity exposure, it may be unnecessary to make any changes to your portfolio. However, if you need to draw income from your portfolio over the next three years it would be wise to have the required funds in lower volatility investments such as GICs, money market, or short term bond funds".
The only addition I would make would be to add "high daily interest savings accounts" to the referred lower volatility investments.
In an October 2014 article, we indicated that "setting a target asset allocation for your portfolio brings your personal requirements to bear on the market". This strategy is still recommended today.
What is asset allocation? It's simply the division of your portfolio between the major asset classes of equities, fixed income, and cash.
One of the most important roles an advisor can fill in times such as these is psychological: listening to concerns, providing re-assurance that the plan is on track, and counseling against human nature (such as the urge to sell during market declines).
Is it time to review your plan? Give us a call and let's talk!
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