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trike. Here are some things I do to prepare myself for economic uncertainty.
i. Think ahead and try to think positively:
Your financial situation won’t hurt so much if you begin focusing on your end goals. So if you expect the next year to be rosier for the economy, then watch out for a stock market recovery several months earlier (e.g. some experts will say 6 months earlier or thereabouts).
ii. Wait for a buying opportunity if you intend to increase your equity position:
If you’re planning to get into equities, then wait for a buying opportunity when the market weakens and take advantage of a developing market correction.
iii. Rebalance your existing portfolio:
You should work to readjust your investments so that our cash position doesn’t overwhelm your shrinking stock allocation. You can also do the simplest thing and just rebalance your portfolio after any recent market shifts. This would just entail staying with your intended allocations and making sure your investments are still conforming to their stipulated amounts.
iv. Sell and lighten your position:
You always have the option to go lighter on those investments that bear more risk. Sometimes, you can decide to make tactical moves based on where you think the national and world economies are headed. You may want to think about “selling” equities in favor of other investments. Or you can lower your risk by moving your most concentrated single stock investments into more diversified positions (such as index funds).
v. Or sit tight and do nothing:
This is a prerogative that you have when the markets begin to unravel. You may want to stay put and stay the course. If there are fundamental reasons to break out of the inertia that is “buy and hold”, then you need to reevaluate just how you can capitalize on the changes you are seeing in the financial and investing landscape.
i. Think ahead and try to think positively:
Your financial situation won’t hurt so much if you begin focusing on your end goals. So if you expect the next year to be rosier for the economy, then watch out for a stock market recovery several months earlier (e.g. some experts will say 6 months earlier or thereabouts).
ii. Wait for a buying opportunity if you intend to increase your equity position:
If you’re planning to get into equities, then wait for a buying opportunity when the market weakens and take advantage of a developing market correction.
iii. Rebalance your existing portfolio:
You should work to readjust your investments so that our cash position doesn’t overwhelm your shrinking stock allocation. You can also do the simplest thing and just rebalance your portfolio after any recent market shifts. This would just entail staying with your intended allocations and making sure your investments are still conforming to their stipulated amounts.
iv. Sell and lighten your position:
You always have the option to go lighter on those investments that bear more risk. Sometimes, you can decide to make tactical moves based on where you think the national and world economies are headed. You may want to think about “selling” equities in favor of other investments. Or you can lower your risk by moving your most concentrated single stock investments into more diversified positions (such as index funds).
v. Or sit tight and do nothing:
This is a prerogative that you have when the markets begin to unravel. You may want to stay put and stay the course. If there are fundamental reasons to break out of the inertia that is “buy and hold”, then you need to reevaluate just how you can capitalize on the changes you are seeing in the financial and investing landscape.
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