Living With Volatility … Again!

Barbara Norman Uncategorized


2015 is proving to be volatile ride. I don’t like to sound redundant but, if you have a well balanced portfolio that complements your goals, then stay the course! Let’s look at some peak to trough activity to illustrate what moving to cash did to investors in the global financial crisis.  Assume that an investor had $100K invested in 50% bonds and 50% stocks on October 9th, 2007 (the then market high).  Assume further that he or she sold at the market low on March 9, 2009. On March 31, 2014, here are the results:

  • The investor who moved to cash lost 29%
  • The investor who moved to bonds lost 10%
  • The investor who stayed the course gained 41%

Jumping in and out of markets and chasing the next great investment can seriously hurt your investment portfolio.  We can’t control the market cycles, but we can control our allocation, some of the fees, and the way we react.  Markets do rebound … we just won’t know when.  For now, I would recommend enjoying lower prices at the gas  pump, lower unemployment, and this delightful weather we are having … because,  this too, will change! Questions?  Please feel free to give me a call.