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September Market Volatility: Are you Prepared?
September market volatility: Are you prepared?
September 2024, Insight from Robert Dilworth
September has historically seen higher market volatility, making it a great time to review your portfolio and prepare for potential fluctuations.
If you’re planning to sell some investments soon to use the funds, consider setting aside cash now or moving the amount you need into safer options where your principal is secure. Consider alternatives like a savings account, money market fund, cashable GIC, or a short-term GIC that matures when you need the funds.
If you don’t have upcoming expenses and are saving for the long term,
you might be in a position to tolerate more volatility in your
portfolio.
For many of us, however, the balance is somewhere in the middle. It’s important to ensure your portfolio matches both your ability and willingness to accept a certain level of volatility.
Here are some strategies to help manage risk and stay on track with your investment goals:
- Diversify: Diversification remains the best way to reduce volatility while maintaining your target returns. Aim for at least 20 stocks in your portfolio or invest in broad-based options like index ETFs or mutual funds.
- Add Fixed Income: Bonds act as a hedge in your portfolio. In times of market uncertainty, money often flows into safer investments like bonds, which can increase in value as equities fall.
- Stay Focused on Long-Term Goals: Avoid the temptation to react impulsively to short-term market swings. A well-thought-out investment plan considers both the highs and lows of the market.
These strategies can help reduce portfolio volatility and give you more peace of mind.
If you’re feeling uneasy about the level of risk in your portfolio, it might be time to speak with your Wealth Advisor to ensure your investments align with your goals and comfort level.
