Intestinal fortitude

Do you have it? It could be tested at some point this year as VIX spikes and the threat level economically and geopolitically increase.

Now is the time to think about your attitude to risk. Let’s face it, the last few years there hasn’t been anything to significantly to test how much risk you are willing to bear in either stock or bond markets.

Don’t wait for the markets to sell off before thinking about how you will react. That’s how mistakes happen and it could be costly.

Remember, everyone is a long term investor when markets are going up and volatility is low.

Revisit your plan and ask is it still appropriate. What will you do if there is a drawdown? Will you stay the course or do you need more flexibility. Is your mix of asset allocation correct. Look at the table which shows decade long returns for both bonds and stocks. Don’t get too active at the wrong time and potentially destroy wealth at the wrong time.

Intestinal fortitude is all about being strong and ignoring the noise when the going gets tough. It’s something you can share too. Having someone to rely upon to test your hypothesis and keep you on track is important.