Many Happy Returns Ready for a portfolio shakeup? What to consider before making a move
Dec 28, 2022
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Pause Before Major Portfolio Changes
- Avoid sudden portfolio overhauls after a single change of mind; allow a cooling-off period before acting.
- Discuss major changes with your partner and treat life savings moves as collaborative decisions.
Test Portfolios Against History
- Model your target portfolio's historical returns, drawdowns and durations before implementing it.
- Prefer funds or indices with long track records to better understand performance across different macro regimes.
Use Stress Testing Tools
- Use portfolio simulation tools like PortfolioCharts to run worst-case historic scenarios and check drawdowns.
- Examine worst 20-year periods and other stress statistics to see if you can stomach the risk.