If you are invested in the markets, whether individual stocks, mutual funds, managed portfolios or segregated funds, you are familiar with market volatility and the effect it can have on your portfolio.
The fact that we are in year ten of a bull market and world conditions are somewhat uncertain, there are numerous opinions that suggest it may be prudent to begin taking some risk off the table. It is important to remember that low risk does not mean no risk – investments that are classified as ‘low’ risk can decline, sometimes even more than higher risk funds. If you are fee conscious it is important to note that lower risk portfolios may have the highest costs.*
One of the most important objectives of your investments is to allow you to maintain your lifestyle for the rest of your life, but, equally important, it should allow you to sleep at night.
If you notice that you are more concerned when your monthly statement shows a decline and you are worrying about your future if your funds decline, it is a good time for an overall risk assessment. If you have not compared your goals and financial plan to your portfolio performance for a year or more, it is time. It makes sense not to take more risk that necessary to meet your goals. If you need to take more risk in order to potentially earn more, you may have the option of saving more, or, raising more funds by selling a fixed asset – check your options, you may be on track without stressing over unnecessary risk.