During any period we can end up focussing on the short term (negative) numbers within our portfolios. This is a perfectly normal human behaviour, but as I have said before & will say again, our portfolios should be in service to our financial plans.
By this I mean, how your portfolio is allocated should be driven by goals & timelines that have been identified & are built into a plan that is very specific to you & your family. You should easily be able to understand why your portfolio is invested the way it is.
The further you are from retirement the more these volatile periods create opportunity for you.
However, the closer you are to retirement or indeed if you are in retirement, there should be a specific plan in place for you, that takes into account your spending requirements in the short, medium & long term. If this isn’t the case then you may be blindly walking into the abyss
The goal of all financial plans should be to try & ensure that you don’t run out of money in a 30+ year retirement. How your portfolio is invested is a large part of this equation.
Your plan should be specific to you & your lifestyle. The portfolio should be in service of your plan.
Beware all who are only interested in your portfolio & don’t offer a plan.
Hence the plan comes before the portfolio!
This excellent article in this weeks Irish Times, hopefully highlights this point even more