Feb 7, 2018
Personal Investor: Time to step back and run a portfolio gut-check
By Dale Jackson
For investors aiming for retirement years or decades from now, the current market volatility shall pass.
At this point you can either ride it out, look for bargains, or watch and learn. Try this portfolio gut-check:
- Compare recent returns from your entire portfolio (including fixed income) with broader markets to see how well it absorbs risk. The S&P 500, arguably the best benchmark for a diversified portfolio, is down six per cent from its Jan. 26 high. Your loss should be less.
- If the markets are keeping you up at night, it might be time to reassess your risk tolerance. Keep in mind that as you get older, and retirement gets closer, you need to count on your savings being there. Consider more fixed income or an annuity, where payouts are guaranteed.
- If individual investments are holding too much sway in your portfolio, especially ones that have enjoyed big gains, it might be time to trim them when markets stabilize and rebalance to ensure your portfolio is properly diversified.
- Is this a buying opportunity? Can you buy stocks you already own, or stocks you like, at a discount?
