“Most battles are won or lost long before the first shot is fired.”
Attributed to Napoleon Bonaparte, this statement highlights the importance of a well-thought-out investment plan that anticipates steep market declines over one’s investment horizon. Those prepared for such eventualities, by not taking on greater risk than they can tolerate, as far less likely to succumb to the panic selling that dooms so many investors.
Recent market volatility provides a good impetus to reassess your asset allocations to ensure that they are consistent with your ability, willingness and need to take risks. While most U.S. economists anticipate continued strong economic growth, Larry Swedroe reminds us that stocks are risky investments.