As I watched the stock market tumble during the pandemic, I resisted looking at my superannuation portfolio, a little scared at the massacre I might see. On the other hand, I am not yet ready to retire, so I have some time to recover from the pandemic crisis and accumulate a nice retirement nest egg, albeit a little bit smaller.
Thanks to advice from my financial planner, I understand that a downturn is a time to stay disciplined and remain patient. The high returns we had seen on the stock markets over the recent years may have gone away, but it wasn't a time to panic.
The investment philosophy of my retirement savings is to be disciplined, patient with no forecasting. This emotional rollercoaster has become a little easier to handle by having my portfolio sufficiently diversified. Diversification is a form of risk management in the investment decision-making process. It helps you live to see another day in the markets.
It is a growth versus defensive approach. As stocks crash, bonds start to do their job by providing stability in the down market. Maintaining a balanced, diversified fund of shares and bonds is the key. Rebalancing the ratio of shares to bonds is the only decision you may need to make in these current volatile economic times.
Thanks to advice from my financial planner, I understand that a downturn is a time to stay disciplined and remain patient. The high returns we had seen on the stock markets over the recent years may have gone away, but it wasn't a time to panic.
The investment philosophy of my retirement savings is to be disciplined, patient with no forecasting. This emotional rollercoaster has become a little easier to handle by having my portfolio sufficiently diversified. Diversification is a form of risk management in the investment decision-making process. It helps you live to see another day in the markets.
It is a growth versus defensive approach. As stocks crash, bonds start to do their job by providing stability in the down market. Maintaining a balanced, diversified fund of shares and bonds is the key. Rebalancing the ratio of shares to bonds is the only decision you may need to make in these current volatile economic times.