Blogs & Comment

Investors in the headlights

Investors are paralyzed. They need to do three things right now.
Yes, its time to stop acting like a deer in the headlights. While one shouldnt be checking their account everydayduring a bear market, they still need to review their portfolio to take steps to position it for the future.
Its not the time for inaction, Warren MacKenzie, President of Second Opinion Investor Services Inc., states emphatically. Here are three things to do:
1. Harvest tax losses in taxable accounts to claim against past/future capital gains for tax purposes 2. Rebalance portfolio since your asset allocation has likely moved considerably off target (buy low and sell high principle) 3. Look across the valley and remember have the courage to invest, as Mr. MacKenzie notes.
Bear markets are also times when investors begin to think about switching advisors. Doesyour advisor seem to be hiding from you and is your portfoliodown a lot more than expected? That could show your advisor has put you into the wrong investments for your risk tolerances or that they did not explain the risks to you well.
There is a natural tendency for advisors to let the winners ride instead of rebalancing during a bull market, says Mr. MacKenzie. And with such a long and strong bull market coming to an end, its possible you went into the bear market with an asset allocation that was not the right one for you.