When markets are volatile your gut reaction may to be to run for the hills or for this conversation, want to "move it all to cash!" but, we're here to remind you to play it smart and to reach out if you feel it's time for a check in.
As your life changes you may certainly have reasons to change the risk in your portfolio to align with when you will be needing the funds you're investing or to align the funds with goals you have established. However, those updates generally should not be correlated with market movements.
In general the level of risk you decide to take on in your portfolio should be determined by three things:
1. Your time horizon
How long until you need to start utilizing the funds in your account? As a general rule we say anything that you need in the next 3 years - for example to buy a house, should be in cash. If you need it, you need to know it will all be there at the exact time you need it. As you start planning further away from your goal in time your portfolio has the time to move through market cycles and allows you therefore to theoretically assume more risk into your portfolio.
2. Your Goal
Do you HAVE to make it to the finish line or would you simply LIKE to? Have to and Like to goals may have different investment strategies. Our "have" to goals focus around retirement, debts, and college funding. Our "like" to goals are generally focused around gifting funds at death, taking the family on a big vacation, or purchasing a second home.
3. Your Risk Appetite
How does your stomach feel about market movements in general and what type of risk taker are you? While we can use Modern Portfolio Theory to develop a portfolio aligned with your time horizon, goal strategy and risk tolerance at the end of the day you have to feel comfortable with the way you're invested.
In the end, if you are properly allocated towards your goals based on your time horizon and risk appetite we often suggest riding the wave. However, if you feel you need to update your goals or introduce a new one to your portfolio, it's a great time to reach out.
If you'd like to take a risk assessment you can email us at HELLO@JORDANWM.COM and we'll send you our questionnaire or click here to take a few question quiz right on our website.
You can also schedule by clicking Let's Chat here or on the website.