What to do to your portfolios during a turbulent market

Good Morning CT at Nine

(WTNH)– The recent downturn in financial markets can be an opportunity for investors to buy in at a deep discount. 

But for others, it can lead to mistakes that ultimately have a large negative impact on their portfolios.

Chartered Financial Consultant John Caserta explains what investors should be doing with their portfolios during a turbulent market:

· Consider your ultimate goal.

o Do you need the money today or at some point in the distant future?

o Make sure the allocation of your portfolio – what you’re actually invested in – is in line with your goal.

· Check your appetite for risk.

o If the recent performance of your portfolio is causing you anxiety, it might be an indication that you don’t have the right investments for you.

o Talk to your advisor about what steps you should take.

· Avoid making short-term changes.

o Becoming more conservative after a dramatic drop can make it difficult to regain any losses. Before making any changes, consider your long-term goal.

o Trying to time the market can have a real negative impact on your long-term results. It’s difficult to know when to get in or out of the market.

Here are common mistakes that Caserta says people make during times like this:

· Head for the hills!

o Investors fail to put events into perspective and that can lead to making short-term changes in a portfolio – like moving in and out of the market – that can affect negatively affect long-term results.

· Going all in!

o It’s tempting to look for opportunities during times like this and get swept up in the frenzy – maybe it’s a biotech firm racing to find a vaccine or a tech company developing solutions for a changing workforce.

o Consider Zoom – Investors rushed to buy Beijing-based Zoom Technologies thinking that it was the provider of Zoom (which is really California based Zoom Video Communications).

· Wait.

o People look at turbulent markets and decide to wait until “things calm down” before investing. The problem is knowing when to get back in can be difficult (or nearly impossible).

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