If you want to get excess returns in the market, expect volatility and price fluctuations. You cannot have one without the other.
The alternative is to buy a Treasury Bill or a money market fund; but if you want a higher rate of return, you have to be willing to accept more risk. Bull and Bear markets will cycle; and while it’s never comfortable when the market drops, just remember that the market is priced to provide investors with a return each and every day.
The only thing that is certain about the market is that risk and portfolio fluctuation is a given. Yet, risk can be managed. Creating diversity across stock sectors, countries, and the world is critical. The combined financial science of globally diversified portfolios that include fixed income and some cash (which act as shock absorbers) helps our clients ride out the turbulent times.
By accepting the reality of the market and planning for its cyclical nature, we are poised to help our clients stay the course and grow their portfolios over time.
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Jeff Holland
VIAIV