The art of long-term investing is about surviving the short run. It’s risk management 101.
This is a friendly reminder that every investment brings the possibility of gain or loss. But when the market’s rising, and everything is great, it’s easy to become complacent and focus less on the downside.
Every investment has a downside, even if you can’t see it. Random things happen. Being wrong is possible. Markets are always changing, and with it, the riskiness of your portfolio.
Prudent risk management starts with the obvious question: what can go wrong? What’s the downside? Now is a good time as any to reacquaint yourself with it.
Because when the market’s rising, and things are going well, it’s the perfect time to test the survivability of your portfolio and make any needed adjustments. Risk management only works if you prepare in advance.
Don’t just take it from me: Continue Reading…