Happy days are here again, right? The market is red hot and real estate is coming back, right? Not so fast… As an advisor, I feel the need to force my clients to “steel” themselves against the turbulence we know awaits on the horizon.
The year 2014 could provide a bumpy ride for financial markets. How does a stock market grow 25 to 30 percent in a year, in which the economy is only growing at a 2 to 3 percent rate? What happens when the Fed finally figures out it can’t just print $85 Billion per month forever?
I am not telling clients we should get out of the market, just that the euphoria, as defined by a rapidly ascending market, can’t be trusted. Trying to “time the market” is a fool’s game. Stay diversified, know your risk tolerance and time horizon, and brace yourself for a turbulent ride.
The bottom line is, if you know you need to adjust your asset allocation, do so now while it is safe emotionally. You never want to be forced to make changes while in a financial panic. Don’t let this year’s smooth ride leave you ill-prepared for the inevitable bumps along the way. read more