/Preparing for Volatility

Preparing for Volatility

Two weeks ago, the Bull wrote that soon, volatility would, most likely, be on the rise. Well, here it is! One may never know what the catalysts are, but markets often give out signs of vulnerability. The Bull also stated that any downturn should not be too severe because of the immense liquidity and economic support still in the system.

However, there are some things that are prudent to do. Preparation can mitigate damage and position portfolios to benefit. Here is a check list:

  1. Make sure you have sufficient cash to meet any up-and-coming needs.
  2. Ensure you have the appropriate allocation among asset classes for your circumstances. Over time allocations may creep out of your ideal parameters.
  3. Review holdings and sell the weak that have been disappointing. This will give cash to upgrade your portfolio as opportunities arise.
  4. Do put this cash to work. Don’t freeze-up, you will never catch absolute lows, but a bargain is a bargain.
  5. Take some losses by making prudent switches among holdings. These can be used to off-set gains later. There is almost always another equivalent security that will come back just as well as your initial one.
  6. Above all, do not panic. These are times of opportunity, treat them as such.

The Bull and his partners hope this helps. We have been putting these principles into action on behalf of our clients.  At the very least, stay steady my friends!

The Lonely Bull

Scott C. Wohlers
Vice President
Riverplace Capital Management
Office : 904-346-3460
Cell : 904-614-8000