Markets at all time highs is not news anymore.
But that’s made a mess out of you. You are uneasy.
You check your portfolio tracker every day, noting the daily rise or fall. You can feel your gut wrenching.
The question on your mind – what should you do with your investments?
Take it all out!
Invest more! OR
Wise people say that you should make the most of your present.
So yes, the fact in the present is that the market highs are not alone. There is the volatility sending your portfolio as well as your mind in a spin.
What can you do to make the most of this present time? Two things – a reminder and a warning.
#1 The Reminder
Something I have often repeated is that use this time to re-evaluate your portfolio.
Check your asset allocation (the various investments and allocation) – has it strayed too far from your stated asset allocation? If so, rebalance the assets. Take the money out from the over allocated and put it in the under allocated.
In fact, use this opportunity to weed out the bad investments from the portfolio such as ULIPs you don’t need or funds that don’t suit your risk profile. This will make the portfolio more lean and manageable.
My personal rule is that your entire portfolio should fit in one A4 size sheet in a 12 font size.
#2 The Warning
The markets are in a bull run and it is highly tempting to keep riding the bull. But you never know when the bull starts s**tting.
You should not leave yourself exposed to be hurt. A good time to go back to your investment policy statement and read your risk management practices. (I bet you don’t have one!)
Here’s the most important thing.
No portion of your money that you need in the next 3 years should be invested in stocks or any other volatile asset.
If it is there, take it out now and put it in bonds, FDs or any other fixed income instrument. It is more important that you have the money when you need than to fall back on your friends or a bank for a personal loan.
There is a weekend coming up. The markets will be closed, thus one less distraction.
Use the time wisely. Take one hard look at your portfolio and ACTION!
You may not get the warning again!