By Sheryl Rowling
- Sheryl Rowling
SAN DIEGO –Dear Money Maven: The unprecedented debt ceiling issue and recent market volatility are making me schvitz with worry. Should I move to cash or change my investment strategy to protect against a possible market slide? Fearfully, Fermisht
Dear Fermisht: During these tumultuous times (and always), it is important to remain steadfast in a solid, disciplined, diversified investment strategy, which in many cases has outperformed the overall equity markets. Diversification within your portfolio, which should include foreign and alternative investments, can help to mitigate any downturn in U.S. markets. Additionally, a long-term strategy will position your portfolio to perform well in the long run – even though the
market might experience temporary downturns.
The purpose of asset allocation (holding a diversified portfolio) is to limit downside risk while producing a long-term expected return that will help you to accomplish your goals. Avoiding volatility altogether would limit your investment return to bank account interest rates, which would not keep up with inflation. Volatility is part of investing. And, when volatility occurs, you should proactively rebalance your portfolio (selling high and buying low to take advantage of opportunities as well as maintain your risk/return parameters) and harvest tax losses (to assist in lowering your tax bill).
It is always a good idea to consult with a knowledgeable professional. An Investment Advisor Representative is an appropriate choice because he or she is
legally held to a fiduciary standard, which requires putting your interests first.
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Sheryl L. Rowling, CPA/PFS, partner of Moss Adams Wealth Advisors LLC, has been providing tax, financial planning and investment advice for over 30 years, since 1979. Sheryl was named one of the nation’s top 250 financial advisers by Worth magazine, received recognition as one of Accounting Today’s 100 Most Influential People, and was named a Five Star Wealth Manager by San Diego Magazine*. Contact her at sheryl.rowling@sdjewishworld.com .(*Third- party rankingsand recognition from rating services or publications are no guarantee of future investment success. Working with a highly rated advisor does not ensure that a client or prospective client will experience a higher level of performance or results. These ratings should not be construed as an endorsement of the advisor
by any client, nor are they representative of any one client’s evaluation or experience with the advisor.)