How to Protect and Grow Your Wealth in a Volatile Environment
"EVERYONE HAS A PLAN UNTIL THEY GET PUNCHED IN THE FACE" - MIKE TYSON
This is my favorite quote when I think about investing. I love it because it was not intended for investing, yet, so relevant. Most people investing in the markets will claim they are invested for the long-term and will be patient. Most investors adhere to a Buy-and-Hold Strategy.
It makes theoretical sense but is very difficult to apply in practice. When losses become a reality (i.e. they get “punched in the face”), things change. The first quarter of 2018 was the first punch that our markets have experienced in a while. We discuss our suggestions on how to deal with it and continue to grow your wealth through these challenging environments.
When volatility emerges and investment losses become a reality (i.e. they get “punched in the face”), things change. The first quarter of 2018 was the first punch investors experienced in a while.
In these types of environments, it is more important than ever to remove your emotions from your decision making and focus on the facts. The most successful investors are extremely good at this. Removing emotions and focusing on the facts is where our Risk Odometer becomes extremely useful.
Our Risk Odometer is a rule based system we use for judging the risks in the stock market. We use it as a guide for making tactical asset allocation decisions between higher returning investments and stable, defensive investments. Our research has shown it has been helpful in minimizing large losses and increasing returns.
About the Author
As co-founder and Chief Investment Officer, Mike brings real-time investment management experience to clients. Prior to forming FC Wealth Solutions, he spent 15 years working on Wall Street as a trader and portfolio manager for some of the industry’s most well-known firms. His previous experience at Morgan Stanley, Royal Bank of Canada and Hutchin Hill Capital gave his valuable experience in institutional money management. His focus on continual research helps him identify macro trends and strategic investments for client portfolios. His research has enabled him to develop many of the rule-based investment strategies the firm uses for managing client assets and monitoring the markets.