In the video below, Morningstar’s Christine Benz shares some timely advice on what to do and what not do when experiencing a volatile stock market.
For starters, she explains not to panic, and to avoid “all-in” or “all-out” bets on the stock market; marketing timing is almost impossible and so maintaining the proper asset allocation between stocks and bonds is key. We spend a great deal of time finding the right asset allocation for our clients, so their portfolios can both participate in the upside for the stock market, but also avoid extreme bouts of volatility that would force panic selling should the stock market decline. Benz also stresses the importance of periodic rebalancing, should certain asset classes or sectors become over/under weight. We wholeheartedly agree, and believe this is the surest way to ensure a “buy low, sell high” strategy over the long haul.