Is Your Portfolio Ready For a Market Downturn?
Market fluctuations are a normal part of the economic cycle, but when it comes to your retirement, the timing of when the market drops can matter more than how much it drops. Market volatility is an even bigger cause for concern when your retirement plan is sitting at multi-year highs.
In the last couple of decades, there have been several significant downturns that set many people back in their retirement plans. In fact, there have been sixteen down-bear markets in the last ninety years. Correction number seventeen will arrive, but it is impossible to predict when. What are some steps you can take to prepare your portfolio for a downturn?
Sports News | Nike Air Max 270 - Deine Größe bis zu 70% günstiger
How to Protect Your Investments
Market volatility can mean the difference between living comfortably in retirement or just getting by. Facing a large decline in the early years of retirement can be disastrous. Based on historical data, there is more than a 50% chance that you could experience a bear market in the first five years of your retirement. The following strategies won’t eliminate loss entirely, but they may provide a buffer against the natural ebbs and flows of the market.
Stay Calm
It’s easy to get swept away emotionally when the market negatively affects your finances. But if you stay true to your investment strategy and avoid making decisions when emotions are running high, you won’t run the risk of losing even more. As long as you have created a disciplined financial plan and are rebalancing your portfolio regularly, you are setting yourself up for success. Your number one priority is to protect your principal, so don’t gamble with your investments when the market is struggling.
Make it a Priority to Diversify and Rebalance
We’ve all heard about the importance of diversification when it comes to maximizing our investments. But as you get closer to retirement, it’s even more important to make sure you are appropriately invested. This is the time to reduce your risk and ensure that you have the right asset allocation. In this way, you can minimize the impact that any one declining investment holding can have on your overall portfolio performance.
Rebalancing is also a key factor in keeping your portfolio safe. It’s not enough to create proper diversification and just walk away. You need to regularly analyze your portfolio to ensure that it lines up with your risk level and that you haven’t become too reliant on any one asset category.
Create an Emergency Fund
This strategy is all about being conservative. While cash investments may not provide a lot of growth, having a cash contingency fund with at least one year’s worth of living expenses will protect you against having to sell investments at low values to free up cash. Examine spending patterns and find ways to invest even more into cash or cash equivalents, such as short-term bonds, certificates of deposits, or Treasury bills.
Work With Your Advisor
Finally, and most importantly, work together with your advisor to plan ahead for the next bear market. You don’t want to worry about running out of money in retirement, so let me help you minimize your exposure to losses when the market drops. I can help you make rational decisions, no matter the state of the market, and guide you to stay true to your investment strategy.
Contact me at 949-481-1807 or This email address is being protected from spambots. You need JavaScript enabled to view it. to discuss your options to increase profits and protect against loss, even when the market experiences a downturn.
Meet Rick
Over a 25-year career in financial services, Rick has helped hundreds of business and personal clients meet their investment goals by developing risk-efficient portfolio management strategies. He holds degrees in Economics and Psychology from the University of California, Irvine.
The water is Rick's second home: He and his family have been fishing Southern California and Baja going on four generations. In the 1940s, his grandmother worked at the Cannery Restaurant in Newport Beach—when it was an actual Albacore cannery. In the 1950s, his father was on the crew that built two of the boats still in service at Dana Wharf Sportfishing.
To schedule a complimentary wealth consultation or to get a second opinion on your financial plan, contact Sportfishing Financial today. To learn more about Rick, visit his website and connect with him on Facebook. To ask a question or get our list of upcoming fishing trips, call 949-481-1807 or email This email address is being protected from spambots. You need JavaScript enabled to view it..