With a considerable run in the stock market, it might not be time to get comfortable with increased earnings.
As we approach the last quarter of the year, it could be time to make some changes as a correction could be nearing.
“Asset allocation is a strategy that looks at your balance between safe and risky investments which considers how those investments are divided amongst varying asset categories,” Reeves says.
“Depending on your age, financial goals, risk tolerance and time horizon, asset allocation is unique to every individual.”
Ninety percent of an individual’s investment performance is determined by their allocation.
It ultimately comes down to how money is being invested over time.
As you get closer to retiring, you have moved from the accumulation to distribution phase, and you want to make sure that you have enough of your portfolio safely invested.
“It is crucial to reevaluate where you are at and potentially take some of those winnings off the table,” Reeves says.
”We do not know exactly what will happen, but when the stock market has been running so high for so long, rebalancing is necessary to make sure that your assets are allocated accordingly. This will protect you when the next correction occurs, to ensure that you are not taking too much risk and compromising your retirement.”
With a long running, upswing in the stock market, it is crucial to assess how your assets are being allocated and the consequences you could face with a correction.
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