Posted: 06.15.2005
Investing in Changing Times

When you opened your investment statements in 2001, you may have been alarmed. Over the past few years, financial markets have taken some twists and turns. Before making any investment moves, ask yourself the following questions:

What's my plan for choosing investments?
It's easy to make impulsive decisions when you're not sticking to a clear investment strategy — or if you don't have one. Most long-term investors (those saving toward goals beyond a 5 year timeframe) will want to build broadly diversified portfolios that include different assets (stocks, bonds, real estate, etc.) and investment styles consistent with their financial goals, time horizons and levels of risk tolerance.

Why would I want to change my investments?
If you're seriously questioning your investments because of market ups and downs, you may not have a high tolerance for investment risks. Reacting to short-term events or trends — even momentous ones — is usually a mistake. If you don't need to live on your savings now, time may be on your side and you may be able to recover from a short-term loss.

When's the best time to make my move?
There isn't a "best time" because you can't know exactly where and when investments are going to gain value. Trying to time an entry or exit from the markets is difficult and rarely successful over the long term.

Should I do nothing?
It depends. It may be wise to let your strategy work for you during periods of uncertainty if you are a long-term investor and have built a well-diversified portfolio. However, there are a few other solutions.

• Consider investing in a balanced fund(s). Balanced funds can offer you diversification — across asset classes, investment styles, and investment managers — that may help buffer the effects of a loss in a single market or security. Often, balanced funds are rebalanced automatically to stay in line with your target mix of stocks, bonds and other assets.
  
  
• You may want to consider rebalancing if your portfolio mix is different from your target strategy. If you feel you must choose new investments because you have too much investment risk, proceed slowly. First, come up with a more suitable long-term strategy and then gradually transition your assets (existing balances and new contributions) to the new mix.
  

What's the bottom line?
Although some market movements may be more sustained or dramatic than others, history has shown markets eventually return to "normalcy" — meaning they react to the value of the companies behind the securities rather than non-market events. If you're a consistent investor, continue to contribute to your investment account every pay period. If you must move money among investments, do so with your overall savings strategy in mind.

Copyright© Frank Russell Company 1998 - 2005. All rights reserved.

Posted: 04.01.2013
Save Health Care Costs BY OFFERING AN ON-SITE PRIMARY CARE CLINIC...

Posted: 04.01.2013
Insurance Costs Rising Across Many Categories...

Posted: 04.01.2013
BE PROACTIVE TO PREVENT WORKPLACE VIOLENCE...

Posted: 04.01.2013
401(k) Fiduciaries: Is Your Plan Putting You At Risk?...

Posted: 04.01.2013
DOL Delays “Notice of Coverage Available Through the Exchanges” Requirement for Employers...

Posted: 12.18.2012
Save money on your retiree health insurance with an EGWP...

Posted: 12.18.2012
Protect Yourself with EFT Fraud Coverage...

Posted: 12.18.2012
How to Use Individual Driver Motor Vehicle Records to Manage Risk...

Posted: 12.18.2012
Great News!...

Posted: 09.04.2012
Major Trends Driving Need for LTC as an Employee Benefit...

Posted: 09.04.2012
The decision has been announced....

Posted: 09.04.2012
Credit Insurance...

Posted: 09.04.2012
Why borrowing from your 401(k) may not be in your best interest...

Posted: 06.19.2012
Changes in Worker’s Comp Calculations Will Cost You $1,000’s of Dollars...

Posted: 06.19.2012
Not all Marine Vessels (or Insurance Policies) are Created Equal...

Posted: 06.19.2012
How Effective is Your Wellness Education?...

Posted: 06.18.2012
Supreme Court Hears Affordable Care Act Arguments...

Posted: 03.23.2012
Retirement Planning Tips for 2012...

Posted: 03.21.2012
Do You Know the Six Factors Affecting Your Property Insurance?...

Posted: 03.21.2012
Rebating Health Insurance Premiums to Employees...

Posted: 12.30.2011
Secure Your Assets with a Micro Captive...

Posted: 12.30.2011
Texting While Driving...

Posted: 12.30.2011
Helping Employees Bridge the Gap with Accident Insurance...

Posted: 10.04.2011
Disease Management...

Posted: 10.04.2011
What is your Cyber Risk?...

Posted: 10.04.2011
Control Workers Comp Costs...

Posted: 10.04.2011
Steps to Filing a Flood Claim...

Posted: 10.04.2011
Should I Invest in a Roth 401(k) or a Traditional 401(k)?...

Posted: 07.05.2011
The Sky Really Can Fall...

Posted: 07.05.2011
Directors & Officers Liability Insurance...

Posted: 07.05.2011
Health Care Reform...

Posted: 07.05.2011
For Your Information...

Posted: 04.06.2011
Repealing Health Care Reform...

Posted: 04.06.2011
Help Your Employees Comply with New Over the Counter Rules...

Posted: 04.06.2011
Tax Act - President Significantly Changes Federal Estate Tax Law...

Posted: 04.05.2011
Solving the Myster Behind Equipment Breakdown Coverage...

Posted: 12.20.2010
"Everything you need to know" about Grandfathering your Health Plan...

Posted: 12.20.2010
The Importance of Employee Benefit Liability & Fiduciary Liability Due to Health Care Reform...

Posted: 12.20.2010
IRS Delays: W-2 Health Cost Reporting Requirement...

Posted: 12.20.2010
Preventive Care Coverage for Adults & Children...

Posted: 12.20.2010
Brown & Brown of Detroit is honored for the third time...

Posted: 10.05.2010
Understanding Fiduciary Liability and why ERISA bonds are not enough...

Posted: 10.05.2010
Affordable Care Act - Sept. 23rd...

Posted: 10.05.2010
Renting a Car? Make Smart Choices Before You Visit the Rental Counter...

Posted: 06.21.2010
Health Care Reform - Are You Ready?...

Posted: 06.21.2010
Michigan Catastrophic Claims Association Assessment Increases...

Posted: 06.17.2010
Health Care Reform Time Line...

Posted: 06.17.2010
For Lease Property Vacancy...

Posted: 03.22.2010
Wellness Incentives - How They Work Through Encouragement and Reward...

Posted: 03.22.2010
Tuition Insurance Program Keeps Students in School “While Protecting School’s Cash Flow”...

Posted: 03.22.2010
Estate Tax Changes: What does it mean?...

Posted: 03.22.2010
When is Flood Insurance Needed? ...

Posted: 03.22.2010
HIPAA Breach Notification Requirements...

Posted: 02.10.2009
ALCOS Transitions Name to Brown & Brown of Detroit...

Posted: 02.03.2009
2009 Investment Tools & Tax Guides Now Available...

Posted: 04.17.2007
Trend Back to Professional Guidance Helps Investors...

Posted: 12.01.2006
An Owner's Three W's of Retirement Planning...

Posted: 11.13.2006
New Technology Means Better 401(k) Offerings...

Posted: 07.05.2006
How's Your Financial Fitness?...

Posted: 04.10.2006
Roth Plans vs. Traditional Plans: Which Meets Your Needs?...

Posted: 09.31.2004
Evaluating Your Portfolio at Year-End ...