Are you in a happy place when you look at your portfolio balance and performance? Yes, these are exciting times.  Many years ago, when I first started learning about trading individual equities, I had only experienced a market that was going straight up and thus developed a trading strategy for an up market. The day and subsequent years that followed were a down market and my one-sided trading strategy was not only ineffective but devastating to my portfolio.

We have been in a bull market for about 8 years now and when the down-turn occurs, will it force you into a different income class or postpone your ability to retire or maybe prevent your kid from attending college? I highly recommend you get educated on the different asset classes and how to balance them based on your time horizon.

Having a portfolio of different stock equities is not diversification because its the same asset class. Diversification occurs when your portfolio contains different asset classes. When there’s a downturn in one class, the other asset classes provide a gain or at least some level of stability.

So if you have only been exposed to the stock market over the last 8 years, you need to know what a down market feels like and the effect it will have on your financial future. Get balanced to reduce your risk to a down market.

~H2