On this week’s episode of Tape Talk, Quint and Daniel discuss the volatility transpiring in the market over the past week and what the might mean to investors.
Investors spent the weekend digesting tweets from President Trump alluding to a “no deal” with China on trade after the country attempted to make major revisions in the ongoing agreement. This news caused markets to drop Monday as investors had clear expectations that a trade deal was on the horizon.
Volatility is Back
One of the core truths of investing is that volatility never goes away, it simply takes a short vacation. After a great start to the year, investors may be getting painfully reminded of this fact as they were shaken from their complacency with the market moves this week.
Risk Tolerance and Rebalancing
This week illustrates the importance of two key pieces of your investing puzzle. The first is truly understanding the risk you can tolerate when the markets are volatile, not just when they’re good. The second is regularly rebalancing back to that risk allocation even if it means selling down some things that are performing well to buy things that recently haven’t. Having a plan and sticking to it will put you leaps and bounds ahead of more emotional investors which means in the long-run you’ll likely come out ahead.