SPI
image
Palace Chrysler-Jeep

Raymond James: A column by James Kruzan


Investing guidelines for changing times



shadow
shadow
July 28, 2010 - While the long-term performance of equity markets has historically been a steady up trend, short-term direction is always unpredictable. Amid all of this misgiving about the market's course, what should investors do? Here are some suggestions:

Stay balanced

Build a well-diversified portfolio where different sectors will complement each other and may not always move in the same direction at the same time. It should comprise cash equivalents, bonds, equities, and real estate and tangibles. Your Financial Advisor will help determine how much weighting to give each category and how to sub-allocate within each given an individual's time horizon and risk tolerance.

Reassess risk tolerance

Amid market turmoil, investors may realize that they don't quite have the stomach for stock market volatility they thought. Upon discovering risk tolerance is much lower than imagined, move incrementally toward a more appropriate investment mix. A well-diversified portfolio generally helps to offset instability and can put investors on the path toward achieving financial goals.

Count cash liquidity is key

In the event of a market downturn, investors should determine how long they could go without selling stocks, considering income, pension, Social Security and cash and bond holdings. This exercise can help bring the market's short-term swings back into perspective and help re-focus long-term goals.

Keep a diary

Consider keeping an investing diary. Investors sometimes suffer from selective memory. They may remember thoughts of selling stocks right before a market downturn, but forget that they had that same thought many other times prior to the market's rise. By keeping a diary, investors can see how often their instincts may be wrong.

Take advice from a financial coach

Seek the advice of a qualified Financial Advisor for coaching through the ups and downs of the emotional investing roller coaster and remain focused on long-term goals.

James B. Kruzan, CFP is a Registered Principal and Branch Manager for Raymond James Financial Services, Inc., Fenton and Clarkston.

print
Print
email
Email Link
share
Share
The Oxford Leader
SPI Subscriptions
Site Search