Investment Markets turnover is reaching multi-year highs. Some strategists say that Market turnover tends to be high when uncertainty is high. What does this mean for your investments? Andy Smith of Investing Sense says not much if you have a plan for your portfolio.
“When you look at your 401K make sure you see some diversity. You want some small company stocks, some large company stocks, some international stocks and bonds. Take the least amount of risk you have to take on to get to where you want to be.”
He also urges you to stay away from Exchange Traded Funds - or ETFs. Keep to the plan you and your investment professional created face-to-face and you and your future will be fine.
Smith says not to worry because this year doesn't look like the last few years.
“The Markets are finally turning back to normal volatility.”
Smith says much of the added trading is due to average investors (not financial investment professionals) buying and selling ETFs - which are held for a short amount of time.
“Moms and Dads who are investing for their retirement or their kids’ college educations will watch the market going up and down, see a lot of buying and selling and think they should join in. They don’t! Just make sure you have a plan for your portfolio that you and your financial pro agreed upon while sitting at the same table. Make sure each transaction follows the goals set up in that plan.”