Often, the best time to evaluate or make changes to your portfolio is before volatility arrives, not after.
Missing just the 10 best days over the last three decades would yield an ending portfolio worth over 50 per cent less than a fully invested account.
For long-term investors, the question of whether it’s a good time to invest shouldn’t have much to do with current market conditions at all.
If you have extra cash, a multi-year horizon, and you’ve considered what else you could do with the money , then it likely makes sense to invest the money in a diversified portfolio.
Buying low and selling high sounds great, but over time, markets go up a lot more than down.
Diversification isn’t a magic bullet, but it is perhaps the best tool investors have to protect their portfolio from volatile markets.
The goal of diversification is to smooth investment returns over time and potentially even outperform a concentrated portfolio as a result.
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