Your Funds: Can you actually ‘Keep calm and carry on’? | Business News
David Snowball, founder of MutualFundObserver.com, once told me that there are three sorts of reasons why investors adjust their portfolio: “Strategic, structural and stupid.”
Structure has to do with the specific investment you are buying and whether something has changed there; stupid reasons revolve around emotion and flawed thinking. The strategic reasons to make a change typically revolve around life circumstances. If you have lost a job or things get iffy at work, if your child’s first tuition payment is imminent, if you retire or you win the lottery or inherit a pile of money, if you change financial goals because there are grandchildren, life events need to be factored into your plan.
Until you review life changes as they relate to your finances and make structural adjustments so that the plan you are following is a reflection of your hopes and dreams now, you can’t have complete confidence needed to remain calm and…