Logically, you know your asset blend ought to only alter if your aims alter. But in the face of extraordinary industry swings, you may perhaps have a hard time convincing you of that—especially if you’re retired or shut to retirement. We’re listed here to support.
If you’re tempted to shift your stock or bond holdings to money when the industry drops, weigh your final decision against these 3 factors right before getting any action.
- You will “lock in” your losses if you shift your portfolio to money when the industry is down.
The moment you’ve marketed, your trade simply cannot be modified or canceled even if conditions improve quickly. If you liquidate your portfolio right now and the industry rebounds tomorrow, you simply cannot “undo” your trade.
If you’re retired and depend on your portfolio for earnings, you may perhaps have to take a withdrawal when the industry is down.