- Don't panic. You can't control or predict macro trends. They happen in cycles
- Don't materially change your asset allocation. If you believe you're overexposed to equity and want to keep some dry powder in cash then move around 10-20% at most
- Trying to move big chunks of your portfolio between equities and debt/cash is sure-fire way to sell the low and buy the high on the way back up. We are all human and timing the market is nearly impossible
- Don't try to catch falling knives in single stocks. There will be pockets of the market that are down 40/50/60%. Doesn't mean things can't move lower
- Corollary: in times like these stick to quality businesses or quality funds
- If you own single stocks that you only understand at a surface level, now might be a good time to change those equity allocations to a simple index fund instead. If you don't understand what's going on in a company it's difficult to make sound decisions about its stock during sharp moves (which are bound to happen right now)
- Stick to liquid, high quality assets across the board - now is not the time to be picking up a 24% IRR lease financing asset or a high yield debt fund. If the return looks too good to be true, it probably is
- If you have made investments for short term needs or goals (<2-3 years), probably makes sense to move them to a liquid fund or some higher yielding savings instrument like an FD at a well known bank
Everyone's situation is different, as is their risk appetite. These are just my broad thoughts for the average passive investor. NFA.
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