SUPM044 Positioning your portfolio in turbulent times (524 words)

Positioning your portfolio when markets are on the rise is easy, right? Load up on growth assets and enjoy the ride. But we all know that investing isn’t that easy. This article identifies a number of key strategies that investors should consider when markets are at their most volatile.

As any experienced investor knows, all investment markets have their ups and downs. Regardless of investor experience, turbulent times are a cause of anxiety, and that can lead to poor decision-making.  So if turbulent markets are inevitable, even if their timing is not predictable, how should portfolios be positioned in anticipation of, and in response to market volatility?

What’s your objective?

First up, it’s important to go back to your investment objective. Is it to grow wealth over the medium to long term? Or are you more concerned with preserving capital? Your objective also needs to take account of your risk profile. How would you feel if, for example, the value of your portfolio dropped by 20%? Would it lead to you dumping volatile investments such as shares, or would you see it as an opportunity to pick up some quality shares at a discount?