Скачать или смотреть 3 Tips for a RISING stock market

We all know what to do when the stock market is going down – panic right?

No, you will hear most experts, including us, telling you to keep diversified and keep a long term perspective. That’s a given.

But what do you do when the market is going up? Should you change direction with your plan or portfolio? In this video, we will discuss the top 3 things you need to be doing when the market is going up.

So what action should you be taking now that the S&P 500 is up over 13% this year?

1. Don’t take money out of your portfolio.

Leave the growth in there so you can continue compounding returns. Remember the definition of compound interest is “interest on interest”. Compound interest is one of the most powerful tools for building wealth! However, you can never earn “interest on interest” unless you let your portfolio continue to grow without touching it. Just because your portfolio is up doesn’t mean you need to go on a spending spree!

2. Consider rebalancing your portfolio

Perhaps you only want 70% of your portfolio exposed to the stock market. When the stock market rises, and other assets such as bonds decline, your portfolio can now be more exposed to stock market volatility. After a big runup in stocks you should rebalance your portfolio to ensure you are not overexposed to stocks. Rebalancing is also a good way to ensure that you “buy low and sell high” because you will be selling assets that have appreciated to buy assets that are lower in value.

3. Resist the urge to put more money into the “hot stock” or “investment of the month”. Keep your portfolio and approach consistent!

Investing takes discipline! No two ways about it. An increasing stock market can give you a false sense of confidence – the thinking that stock XYZ is up this year and I am only reading good things about it. The fact is, straying from your portfolio only to chase the hot stock or trend leaves you overexposed to that trend when it reverses. The likely case by doing this will mean giving up all the gains you have made to this point.

4. Bonus: relax and enjoy the ride up!

If you need help making these moves in your portfolio during this stock market rally, please don’t hesitate to reach out to us!