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August 11, 2011

Do you know what you should be doing during volitale markets?

The recent volatility in the markets creates uncertainty for most people.  It is not a time to just react.  It is a time to review and reflect on your investment portfolio.  Ask yourself if you understand your holdings and how they fit together.  If you cannot answer yes to both, you need to determine the answer to both.
Next you should compare your allocation to the allocation you have been using.  The allocation of investment assets is very important in determining your investment returns.  Many believe it is the most important factor.  Your allocation should reflect a diversified portfolio.  The allocation that you establish is your target allocation.
When you established your allocation it should have been constructed with a view toward your financial goals.  Review the financial goals to see if any have changed.  If they have, you should modify your target allocation toward the current goals.
Compare your current allocation to your target allocation.  If the difference is insignificant you may not need to make any changes.  If it seems appropriate to make changes, you need to determine how and when to make the changes. 
Your professional financial advisor can help you determine if you plan and target allocation is appropriate for you and when and how to make any changes that may be needed.         
Market Volatility

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