Over the last 40 years there have been wars in different parts of the world; there have been periods of widespread inflation; there was the recession Australia ‘had to have’; the Asian financial crisis; the dotcom bubble; the Global financial crisis; and more recently the financial mayhem caused by the pandemic. This is not to mention droughts, floods, earthquakes and bushfires.
Reading some of the mainstream media, you may get the feeling that this will be the end it. It will not.
The average bear market (this is what they call it when markets are going down) in shares lasts around 12 months. The longest was 2½ years and the shortest was 33 days. Before we know it, things will be back to normal.
Step 2 – Reassess
Taking a deep breath and relaxing doesn’t mean you should not do anything. Quite the opposite.
Now is a great time to reassess your situation and make sure you are on track to achieve your goals.
Have your goals changed? Are you still on track to achieve them? Are your investments (including your super) diversified? Do you need to change your approach? Do you have a cash buffer in case things do take a turn for the worst? Is your insurance still ok?
Don’t throw the baby out with the bathwater but take the time to make sure you are still heading towards your goals.
Step 3 – Make any changes
This last step is important, but do not do it blindly. Do not ditch an investment just because it has performed poorly in the last 12 months. They all have!
However, consider getting rid of it if the reason you are holding it has changed. For example, let us assume you were invested in a combination of 100% Australian and international shares because you didn’t plan to touch it for another 10 years. You have reassessed your situation and are now wanting to sell your home and retire to the country. If you need the funds you have invested to start living off, you may want to change the mix to include something a little less risky.
I specialise in helping people make sure their money is helping them achieve their goals. Helping them get what they want out of life without having to worry about their money. This can include things like planning for an early retirement, making sure they have enough money for a financially secure future, upgrading the family home, supporting children through university, or building a legacy to leave to the next generation.
If you want to discuss your finances to make sure it is all working for you, book a chat via the button below or contact me on 0417 034 252 or at firstname.lastname@example.org.