Today’s Practical Planning Tip will continue our conversation on my firm’s outlook for the New Year.
Avoid abandoning asset classes that have underperformed: At the risk of sounding like a broken record, something I say very often is “always remember that markets move in cycles.” This means when some areas of the market are up, others will be down. Some asset classes may be down for a while, and others may have superior returns for a decade or longer. Every area of the market will have its day in the sun and none of them will outperform forever. This is why it’s so important to STICK with investments that have had a rough stretch of returns. This may include value stocks, international, emerging markets, and small company stocks. Staying adequately diversified allows you to maintain exposure to all areas of the market. Doing so will allow you to capitalize on any changing market dynamics and be successful over the long-run.