Sarasota Capital Strategies manage assets for individuals and families, providing investment management, and financial planning services.

Scared of the Market?

Tony Welch |

Afraid of the Spooky Market?

             Halloween is now over, but the scary monsters still lurk about.  Although the economy is chugging along nicely, many investors are, rightfully so, afraid of what could happen in a market meltdown similar to 2008-09.  Scarcely a week goes by where we don’t get a call about getting out of the market.  Here’s a few ways to turn investments into a treat that can help you sleep at night:

Diversify – if your portfolio moves in lockstep with the S&P 500, you may want to have a few other asset classes such as gold, bonds, and real estate.  Diversification can help smooth our the bumps in your portfolio.

Rebalance – If your asset allocation goes “out of whack” because of the performance, (good or bad), of some holdings, rebalance back to the mix that you felt comfortable with in the first place.  This strategy has the added bonus of forcing you to “buy low and sell high” as we’re taught to do.

Tax Harvest – There’s rarely a good reason to carry losses into the next year.  Sell losers to take advantage of a tax deduction for losses as soon as possible.  You can always replace that security with something fairly similar if you still like the idea. 

Review – Reviewing your portfolio does not mean staring at it every day all day!  It means look at your portfolio every so often, especially after a period of volatility, to make sure it still is what you need to meet your goals.

Enjoy – Watching the stock market channel all day is a poor use of time.  No one on TV is like you with your same situation, so how can their advice be of use to you?  When you get nervous, take a little time to go for a walk, swim, or a round of golf to remind yourself that there’s other things out there than 24/7 news.  Don’t worry, the news will still be there when you get back, but you may have a different outlook on it!