As more and more evidence mounts that the stock market correction is over, we want to review how we shift back into an offensive strategy ... SAFELY.
That said, since it appears that this correction may very well be a "V-Shaped" correction - sharply down and sharply back up - it is important to understand that V-Shaped corrections are
➡️ a blessing if you have no tactical strategy.
➡️ a curse if you do not understand portfolio math.
The first principle of proper investment strategy is the concept of cutting your losses short, while allowing profits to run. We've discussed that numerous times.
However, once you have that concept down, the next principle to understand is how math works inside your portfolio.
1) Sometimes it is better to look for small or modest gains that you can compound, as opposed to hoping for a big return that may never come.
2) It is also critical to understand how you should size your positions. In other words, how much of your portfolio should you allocate to any trade?
All of these points can be considered "Portfolio Math" and they are just as irrefutable as 2+2 = 4. The math does not lie.
As a result,
📌 You do not need to get in at the bottom.
📌 You do not need to be fully invested at all times.
📌 You do not need to be as "diversified" as Wall-Street typically preaches.
When managing wealth for others, our first priority is in preserving capital.
Our second priority is taking risk safely to grow capital.
This information is intended to be educational. Hicks & Associates Wealth Management does not provide tax or legal advice. You should consult with a qualified tax, legal or financial professional before making any decisions.
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