Since the highs in July the S&P 500 had corrected about 14% – the Dow Jones fell even more. In September, just when things looked about to get worse, the market started moving higher and has not stopped. As of today, the S&P 500 is back to “break-even” for 2015 after an 11% rally off of the lows (see chart below). What now?
If you read some of my previous articles and stuck to your asset allocation, congratulations! Your asset allocation is what allows you to stay invested in the markets at all times – stick to it. More often than not, if you try to “trade” your portfolio you will end up “selling low” and “buying high” again and again. If you thought your 3rd quarter statement was scary, then now may be a good time to move to a more conservative asset allocation. Focus on getting your allocation right, not timing the market.
Statistics courtesy of http://www.zerohedge.com