With interest rates going up monetary supply has been decreasing.⁣⁣ A relative scarcity of money will mean less free capital pouring into the markets therefore is a factor in temporary declines.⁣⁣ Also institutions will seek to divest portions of their portfolios from “risk” assets (usually stocks) and will be enticed to invest in bonds because of their current higher yields.

⁣⁣This can mean our portfolios are in for a bumpy ride. ⁣⁣Question is: How do we handle such a scenario?

⁣⁣Well, whilst I can never give financial advice….⁣…what I CAN do is provide helpful frameworks that you may find useful to aid your decision making.

⁣⁣Here are 3 things that can help you decide:

1. When do I need this money? ⁣⁣The majority of people make investing decisions based on short term thinking. ⁣⁣That's a no-no. ⁣⁣Typically capital invested professionally in the stock market is done so with the expectation that we can really measure results after at least 5 years. ⁣⁣Most people make decisions to sell if they see decreases over a timeframe of weeks, days or even hours. ⁣⁣Sometimes the asset we have purchased is perfectly fine however its our execution of the investing process that lacks. ⁣⁣If this money is not needed any time soon – then do we need to cash in and sell? ⁣⁣That can crystalise the loss meaning we miss out on any subsequent gains. ⁣⁣Time IN the markets beats TIMING the markets, as the saying goes.
2. What is my overall plan? ⁣⁣Really before we make any investment decision we need an overall plan… It's only when we know the destination that we can select the correct vehicle? (asset) to get there. ⁣⁣If things are taking a tank then reverting to your original plan will give you perspective. This will mean we don’t make any kneejerk decisions.
3. What is the quality of the asset I’ve purchased? ⁣⁣The correct assets have shown consistent growth ever since their inception. ⁣⁣They are inextricably tied to the fortune of the global economy and even civilisation itself. ⁣⁣Understanding these what these assets are, and building your portfolio around them WILL give you immense mental fortitude in your investments. ⁣⁣Then your execution will be UNSHAKEABLE. ⁣⁣Much better...

Of course there are many more factors than this in our decision making – these are just 3 pertinent examples.⁣⁣

These 3 will help you make decisions from not from a place of emotion but from a place of logic. ⁣⁣Happy investing.