Courage Can Be Profitable in Tumultuous Times

• 2 min read

Business man under umbrella with heavy rain and storm clouds.
Is the current market volatility making you question whether you should weather the storm?

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Business man under umbrella with heavy rain and storm clouds.

QUESTION:

It’s ugly out there; what should I do?

ANSWER:

You have probably already heard that as long as you have a diversified portfolio and sufficient reserves of cash and cash flow, you have the ability to weather a market crisis. While this is true, it doesn’t really answer the bigger question: Should I weather the storm?

Yes is the answer, even if you believe tomorrow will be another bad day for the stock markets. Success in a crisis comes from executing a well thought out strategy and being opportunistic. Reacting to headlines and big price movements is counterproductive.

So what should you do? The good news is that you’ve already taken the first step with your AMG investment strategy, which in most cases includes some fixed income and cash reserves in case of a crisis. Now that we are in the crisis, there should be no need to sell equities.

This level of market dislocation will create mispriced opportunities. The next step will be identifying those as they emerge, then reallocating your portfolio around the best opportunities. This will take courage because you probably will be advised to buy when markets look really bad. Be prepared, be brave and, most of all, keep a level head.

This information is for general information use only. It is not tailored to any specific situation, is not intended to be investment, tax, financial, legal, or other advice and should not be relied on as such. AMG’s opinions are subject to change without notice, and this report may not be updated to reflect changes in opinion. Forecasts, estimates, and certain other information contained herein are based on proprietary research and should not be considered investment advice or a recommendation to buy, sell or hold any particular security, strategy, or investment product.

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