RecruitmentSuper – Superannuation Categories

Experts Advise Caution in Adjusting Investment Portfolios for Growth

Investors often wonder about the right timing to adjust their investment portfolios, particularly during periods of market volatility. Experts caution against making hasty changes based on market conditions, as history has shown that such knee-jerk reactions may not yield favorable outcomes. Tony Molina, a senior product specialist at Wealthfront, emphasizes that impulsive portfolio adjustments usually do not align with successful investing strategies.

Investing 101: From Stocks and Bonds to ETFs and IPOs, an Essential Primer on Building a Profitable Portfolio

Investing 101: From Stocks and Bonds to ETFs and IPOs, an Essential Primer on Building a Profitable Portfolio | $21.15

While market downturns may trigger the urge to tinker with investments, experts advise maintaining a long-term perspective and staying invested through market fluctuations. The ups and downs are part of the investing journey, and remaining steadfast during turbulent times can lead to long-term growth, especially when investing in index funds and exchange-traded funds (ETFs).

The Quick-Start Guide to Investing: Learn How to Invest Simpler, Smarter and Sooner

The Quick-Start Guide to Investing: Learn How to Invest Simpler, Smarter and Sooner | $25.37

However, there are instances when adjusting one’s investment portfolio is warranted. Ivory Johnson, founder of Delancey Wealth Management, suggests that changes may be necessary if there are shifts in your investment goals’ time horizons, impacting your risk tolerance. For instance, extending or shortening the timeline until retirement can influence the level of risk you are willing to take with your investments.

The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns

The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns | $29.51

In such situations, using robo-advisors can be a practical solution to ensure that your portfolio aligns with your risk profile. Robo-advisors utilize questionnaires to determine the best asset allocation based on your goals and automatically rebalance your portfolio as needed. Platforms like Betterment and SoFi Invest offer these services, making it easier for investors to maintain a suitable investment strategy without constant monitoring.

The Psychology of Money: Timeless Lessons on Wealth, Greed, and Happiness

The Psychology of Money: Timeless Lessons on Wealth, Greed, and Happiness | $34.00

Johnson suggests that significant life events, such as severe illness or windfalls like inheritances, may necessitate adjustments to your investment allocation. These events can alter your need for capital appreciation, prompting a reassessment of your risk exposure. Similarly, Molina points out that life milestones like marriage, emergencies, or nearing retirement could prompt investors to reconsider their risk levels and liquidity needs.

The Intelligent Investor Third Edition

The Intelligent Investor Third Edition | $28.49

When considering individual stock investments, it is crucial to assess your comfort level with tying up funds for an extended period, typically at least five years. While long-term holding is generally recommended for individual stocks, selling a losing position may be prudent if the risk outweighs potential returns significantly. Diversifying through index funds and ETFs can help mitigate risk and enhance portfolio stability.

How to Retire on $3000 a Week: The Property Couch's Playbook for Passive Property Investing

How to Retire on $3000 a Week: The Property Couch’s Playbook for Passive Property Investing | $22.00

Overall, the consensus among experts is that adjusting investments should be approached cautiously, with a focus on long-term growth. Exceptions to this approach include changes in time horizons and risk tolerance, as well as major life events that may warrant a reassessment of investment strategies. By staying informed and aligning investment decisions with personal circumstances, investors can navigate market uncertainties more effectively.

📰 Related Articles


📚Book Titles