Preserving Your Wealth during Uncertain Times

HELEN BOOTH

Let’s face it, the last couple of years have had a significant impact on our investments. From COVID to political unrest to inflation highs to war. The economic volatility of global markets has made it very difficult to plan investment strategies. Do we cut and run or stay the storm?

It is easy to fall prey to panic but remember that investments are long-term and designed to ride out fluctuations in the markets.

Regular highs and lows are normal in the life of any market.

Keep in mind these fundamental principles that will help investments weather the storm.

Keep your portfolio diversified – The best way to mitigate risk is to keep your portfolio diversified. This means investing in various sectors such as financials, energy, property, infrastructure, oil and gas technology, different geographic regions such as the US, Asia, Europe and emerging markets, or different asset classes such as equities, bonds and cash. These help you to carry your eggs in several baskets. If one market or sector plummets, then you still have other sectors or markets that perform.

This is a marathon, not a sprint – History has shown that despite there being ups and down in the markets, over the long term, good returns generally prevail. A long-term investment will ride out the storms in the markets.

Ensure your portfolio stays balanced – Your wealth consultant will regularly rebalance your portfolio to ensure your risk level remains as is (selling or buying stocks, bonds etc., to maintain your risk profile) and to eliminate any dead weight.

Take advantage of low markets – When markets drop, it is a good opportunity to buy valuable stock at lower prices, which will be beneficial when the market has an upswing again. You get more shares for less. This is called unit cost averaging, buying stock regularly to build your stock portfolio so that when markets recover, your assets are worth more.

It is essential to remain calm during volatile markets and let the experts help diversify your investments to spread risk. Always consult with your wealth advisor when you feel panic over falling markets. Remember, the end goal is to build wealth over time. Don’t get distracted by the ups and downs.

Please note, the above is for educational purposes only and does not constitute advice. * No liability can be accepted for any actions taken or refrained from being taken, as a result of reading the above.