Skip to main content

The Trust Company of Tennessee - Live Confidently

Login
  • Home
  • About Us
    • Our Team
    • Community Support
  • Services
    • Wealth Management
    • Corporate Retirement
    • Personal Trust
    • Business Advisory Services
  • Careers
  • Contact Us
  • Events
  • News

What you should be doing now

February 18, 2018 by Sharon Pryse

Help! The market is at a record high. What should I do?!

Yes, the market was trading in record territories, but things haven’t been as over-valued as they might have appeared. Corporate earnings are up, so while the price earnings ratios are high, they are not at “frothy” levels. However, we are certainly not surprised by the recent increase in volatility causing a market correction of close to 10 percent. So, what are the things you should be doing?

Review your anticipated cash needs that will be met from your investment portfolios over the next three to five years. This is a great time to raise cash for that new patio or big vacation you are thinking about taking in the next couple of years.

Make certain that you have realigned your portfolio. If you and your advisers have established that 60-40 stocks-tobonds ratio is appropriate for your risk tolerance, then make sure that’s where you are. Not only that, you should be reviewing this on at least an annual basis. Realigning means that you force yourself to sell things when they go up and buy when they are down. But note, this does not mean selling out of the position entirely. If your plan is for stocks to be 60 percent of your portfolio and there has been a 20 percent increase as there was in 2017, then likely stocks are now 72 percent of your portfolio. Realigning means that you’ll trim the positions down to 60 percent, not selling entirely. This means, in taxable accounts, you’ll have to pay capital gains taxes, but also that you have taken gains off the table and put in other types of investments.

Reassess your overall long-term goals and objectives. If these things have not changed then it is unlikely that your targeted asset mix, in this example 60 percent stocks and 40 percent bonds, has not changed. If your objectives and/ or personal situation have changed then now is a great time to reassess your risk tolerances and your overall asset allocation.

Sadly, most investors don’t obtain the longer-term market rates of return. This is because most investors don’t have the intestinal fortitude to weather significant market declines. We definitely are not market timers, but we do believe this is an excellent time to assess your cash needs and raise cash, if needed, for the next few years as well as look at your risk tolerances and long-term goals.

By having the cash available to meet your needs, you won’t be forced to sell equities in a down market. Hang in there, baby!

Sharon Pryse is the founder and CEO of The Trust Company and can be reached at spryse@thetrust.com.

SIGN UP FOR UPDATES

Contact Us

(865) 971-1902
info@thetrust.com

Find a Location

Connect with us

Copyright © 2023 The Trust Company

By using this site, you are agreeing to the use of cookies to enhance your experience.AcceptReject
Privacy & Cookies Policy

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may have an effect on your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Non-necessary
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.
SAVE & ACCEPT