It’s February now, and President Trump has officially been sworn into office. Executive orders have already been signed and Congress is moving swiftly to make changes to current laws. So we understand that you may be asking - how can my portfolio be great again?
Whether you’re excited or angry, hopeful or nervous, or some combination thereof, we understand. But the question is “should you do something”?
In the simplest of terms, we suggest you do two things:
1) Ask yourself the question – is my investment portfolio built to handle the uncertainty that lies ahead?
2a) If YES – stay the course. That’s what we tell our clients when it comes to their investments.
2b) If NO – or you aren’t sure - seek help. That’s the wise thing to do.
The facts are in. No matter who sits in the Oval Office and no matter what events transpire the markets are going to move. Our job is to help our clients weather the certainty of uncertainty and the potential volatility that may come as current events unfold, reminding them that TIME IN the market has proven to be a much more impactful investment discipline than TIMING the market.
When the election results first came in, the U.S. markets plummeted. Many investors went into panic mode as stock prices declined, taking it as an indication for the future. But then the market rebounded. It seems that stocks are the one thing people tend to sell when they’re on sale (at a loss), which is the quickest way to lose money! Investors who held out during this brief blip were rewarded when the domestic stock markets rallied before the end of 2016.
Diversification is an investing discipline that essentially keeps all your “eggs” in multiple baskets. The benefits include protecting your portfolio against declines, including full-sector crashes like the recession of 2008. Although diversification alone may not result in gains or protect against loss, it has stood the test of time as a wise approach to reaching long-term investment goals versus searching for a sequence of “hot stocks” or trendy investments.
Regardless of your political beliefs, and regardless of what happens tomorrow, next month, or three years from now, we believe the best way to keep moving forward is to stay the course: focus on your long-term goals, remain well-diversified, and commit to being a disciplined investor. Don’t be distracted by short-term pain or short-term gains. Your reward could be quite handsome! Life’s a journey – navigate it wisely!