On the political front, for many people the probability of the unexpected seems higher now than it was with the previous administration. So, it doesn’t seem out of the question that President Trump might inadvertently do something that will scare investors.
How will the decisions that are made affect the ability of U.S. and international companies to continue to earn profits, and how will these decisions impact our domestic economy? We believe if the markets do take a dip it may cause you a bit of anxiety. Now is a time to trim your exposure to stocks and revisit your asset allocation. You never want to make dramatic moves, in either direction, when you’re fearful or under stress. The basis for having a productive conversation is to remove the intense emotions from your investment decisions.
Balance between asset allocation, sector investing, and your cash needs
If you feel uneasy about the markets or your financial goals, we need to discuss changing your asset allocation but not make big shifts, which could derail reaching your investment goals. There needs to be a balance between asset allocation, sector investing and your cash flow needs. There is a near term risk of under-performance in the name of reducing volatility and principle protection.
When individual investors engage in market timing there’s a risk of getting out too late and the question of when to reinvest monies. If you think something will rattle the markets, scaling back on your equity holdings would make sense considering your investment timeline and financial goals.
Let us know your life goals and aspirations. We encourage you to do those things you want to do. Is there a place you haven’t been and you want to visit? Is there an activity or event you want to experience? Are there family and friends you want to see again that live far away? Often we hear from clients that they waited too long to experience some of life’s blessings. People wish they could have or would have done something that they later regret in life. Sometimes it’s too late to do anything about it, but many times there is no better time than the present.