Ignore the crowd and focus on your game plan

US elections, daily pandemic updates, and political scandals dominate the news headlines. In this world of hyper-connectivity and a constant flow of information, investors must be focused on their game plan and learn to tune out the noise of the crowd. As we witnessed during October’s grand final, discipline is the key to success.

Markets don’t like uncertainty. There is significant uncertainty around the outcome of the US elections, as well as the size and scope of a US fiscal package, which requires an agreement with Congress. Add to this ongoing concerns over the pandemic, especially in the US and Europe, and the fraught process of reopening, which has seen mixed success globally.

Managing your portfolio through times like these calls for a solid game plan and the patience to see it through. We can’t afford to bank on one particular outcome (a strategy akin to flipping a coin). We must determine which part of your portfolio will provide protection and which part will allow us to capitalise on the upside and take advantage of potential growth.

Our game plan is simple. In a low yield world, you need growth. We have retained our exposure to growth assets such as equities, especially as interest rates remain low and markets continue to be supported by liquidity from central banks. However, we are cognisant that there are risks in the market and therefore we have diversified our equity exposure to incorporate a mix of investment styles that can perform well in different market conditions. We’re also ensuring that we have exposure to some traditional defensive sectors and investment strategies that we expect to hold up better than the market should we experience a correction.

Periods of uncertainty can provide opportunity as well as risks. As investors, we’re not just playing a single match, or even a single season—we’re playing for long-term success. Markets are unpredictable, but having the right strategy that takes into account a range of possible scenarios, will assist in generating more consistent outcomes over the long-term. We can’t win every game or avoid every market downturn, but we can increase our chances of winning by staying invested and sticking with our game plan.

More Articles

Oldest Buildings in the World.

Check out the oldest Buildings in the...

Read full article

Aged care report goes to the heart of Australia’s tax debate

The Aged Care Taskforce was asked to report on how to fund aged care around the country. In so doing, it took...

Read full article

Removed super no longer protected from creditors: court

A recent Federal Court ruling has found that the transfer of super from a husband to his wife’s...

Read full article

The compounding benefits from reinvesting dividends

Using income distributions to purchase additional ETF units can significantly compound capital growth and...

Read full article

ATO investigating 16.5k SMSFs over valuation compliance

More than 16,500 SMSFs are being scrutinised by the ATO as they allegedly reported certain classes of assets...

Read full article

Investment and economic outlook, March 2024

Region-by-region economic outlook and latest forecasts for investment returns. . The U.S. economy has...

Read full article

The 2025 Financial Year Tax & Super Changes You Need to Know!

The new financial year is fast approaching and so are a number of changes to superannuation contribution...

Read full article

‘Deepfake’ clickbait scamming would-be investors

Fake news and 'deepfake' videos of celebrities and public figures appearing to promote online investment...

Read full article

Sofie Korac is an Authorised Representative (No. 400164) of Prudentia Financial Planning Pty Ltd, AFSL 544118 and a member of the Association of Financial Advisers.

Financial Advice Sydney and the North Shore Office based in Gordon NSW

Financial Services Guide - Disclaimer & Privacy Policy

^