Understanding When To Shift Your Investment Allocations.
The primary question you need to answer is what is your time horizon? Now? Later? Never? Ask yourself, which one of the three applies to me and my money? Once you find your position on time, you can begin to look at what area of the investment market would suit you? Do you feel comfortable seeing large swings in your account value from month to month? Is a consistent fixed return okay? Or do you prefer moderate fluctuations periodically for bigger longterm gains?
The exercise I have just presented is a simple process to yield an answer to a person’s investment risk and investment duration. The end result is a suggested asset allocation between stocks, bonds, and cash. This is where you can buy low and sell high. When the stocks are up more than the bonds, rebalance. When the bonds are up more than the stocks, rebalance. If both the bonds and the stocks are down, reassess.
At the present time we are in a rebalance scenario.
