The Two Most Important Questions

Its been a tough month for US markets. If you've been reading beyond the headlines, you know its been a challenging year for global markets as a whole. 

"Global stocks are trading at their lowest valuations in more than two years as pessimism grows over the growth outlook, dangling the prospect of opportunity to some bargain-minded investors."

A portfolio constantly sitting at its high-water mark is not realistic, nor relevant. A 10% drop in your portfolio stinks.  But it should be expected, temporary, and irrelevant to your day-to-day living. The game is won not by trying to avoid bad markets, it is won by surviving and advancing.

For most, there are only two questions of relevance:

1.)  Is there enough?

2.)  Will I be ok?

Answers to these questions are determined, in part, by quantifying what you have and where you want to go. How much margin of safety is built in to your situation? Have stress tests been discussed that show how assets hold up when a bear market coincides with a retirement date? Have we deciphered the difference between spending needs versus aspirations? If there's a gap, what trade offs or adjustments are on the table for discussion? 

A portfolio balance in itself does not serve as a compass or marker of success. Instead, if you haven't already done so, search for financial confidence around the two most important questions.

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Sources:

Wall Street Journal 'World Stock Values Hit 2-Year Low 10/30/18

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