We have at last entered the anticipated stock market correction in recent days.
This isn’t a reason to get out of the markets, but rather an opportunity to take stock of one’s objectives in order to be secure in the knowledge that you are invested for a specific reason.
If you have medium and long term goals which require further growth in your capital, then you are invested in the stock market for good reason.
If you have short term goals requiring payment soon, then the capital you have allocated to that goal needs to be invested in less volatile assets right now even if you have not quite achieved the growth level that you had planned to. You can then take capital from your cash fund to make up the difference required for that short term goal.
It is also a sound idea to reassess your whole portfolio now in order to determine whether rebalancing is required after the excellent returns achieved in the equity market since early 2009. Rebalancing is required when one’s asset mix has become skewed towards equities beyond the level which is required to achieve your financial goals and it may only be necessary in specific portions of your overall portfolio.
It is always a challenge to accept that a bull run is nearing its end. But lets just be grateful for the excellent growth achieved over the last 5 years and lets use this opportunity to revisit our goals and our asset allocation spreads.