The Savings Game: Should you make changes to your portfolio?
If you have significant investments in the stock market, you have probably watched the recent volatility with trepidation, as the values of some indexes have retreated by 10% or more from their recent highs.
If you’re not concerned about your portfolio, then you don’t have to read this column. If you are concerned, then I hope what follows will help.
Whenever you see a dramatic change in the value of your assets, it is normal to ask whether you should make major changes in your portfolio. That is a legitimate question, and the following four questions should help to answer it.
The first two questions were suggested by Peter Lynch, a former asset manager for the Fidelity Magellan Fund. He became justly famous success managing the fund, and he wrote an excellent, best-selling book explaining how he did it.
The final two questions were suggested by Jason Zweig, an astute financial journalist with a well-deserved reputation for his excellent financial advice column in the Wall Street Journal.