There has been a lot of stock market volatility recently and people have been asking me what should they do with their investment portfolio. While no one has a crystal ball and everybody has their own specific situation, there are some general questions below you can ask yourself when the stock market gets a little choppier than normal.
1. Did the goal for the money change?
Maybe you’ve originally invested the money for the long term such as retirement, all of a sudden you change your mind and you actually need this money sooner. If so, then that may mean you need to change the strategy that you have for that money.
2. Did your risk appetite change?
Perhaps you started investing with a gung-ho attitude, believing you can take all the risks to get potentially higher returns. Then that changes and you don’t want to take on that level of risk anymore. This may be a reason for you to review your investment strategy and make some changes.
3. Is your money allocated in a diversified portfolio?
If you could honestly answer ‘yes’ to this question, that you know your money follows an allocation model and you are rebalancing the allocation on a regular basis, then you might not need to make any changes.
Again, everybody’s situation is different – you have different risk tolerance, different goals and different timeframe to hold on to their investments. You need to be aware of what your specific needs are when it comes to investing, do your homework and make sure you’re investing properly.