When the financial markets are in turmoil and account balances start to fall, there is a strong temptation to ask your financial advisor to "do something" to stem any perceived losses. Yet it is often the case that staying the course - or doing nothing - proves to be the better path.
Here is one recent example as represented by the chart below: A hypothetical 60% stock / 40% bond portfolio that stood at $1 million on the morning of November 1, 2018, would have lost 5.7% of its value by Christmas Eve. Yet selling the portfolio at that time and fleeing the markets would have cost an investor tens of thousands of dollars in just two months.
When faced with a similar situation, consider how you might feel if markets rebounded and you could have recouped all your money, and more. That's why it's best to stick to the long-term plan you and your advisor have built. Any changes should be made because of changes in your life, not changes in the markets. If you have questions about making portfolio moves, remember to talk to your financial advisor before acting.
