Is this the top of the market? If so, are you (and your investments) ready for the possible roller coaster that could follow?
That’s the gist of a recent WSJ article, and it’s not bad advice to consider.
Investor’s appetite for risk is constantly changing. When the market is bullish (like it is right now) investors want to maximize their returns and are willing to take on more risk. Yet, as soon as the market turns sour, investors want to limit their risk and move to something “safer”.
That knee-jerk reaction can often end up hurting the investor in the long run. They end up buy and selling at the wrong time.
It’s better to take time now for investors to imagine how they would feel if there was a 5% or 10% drop in the market. Would they stay calm and stay the course or would they be looking to move to more conservative investments?
If you haven’t thought about that, take some time now to consider what you would do.
Of course, we can help guide you.