Over the long run, stocks and bonds will go up. Over the short run, it s anyone s guess. The real losers are the ones who sell at the bottom. The winners are those who remain patient, and even increase their exposure to asset classes that have experienced a sell off. Our recommendation to our clients is to remain focused on the long-term.
Diversification pays off in the long run, even if it doesn t always help over shorter periods.
Additionally, we feel now is as good a time as we can remember to rebalance. If a target weighting to equities made sense a year ago, it makes even more sense today. Finally, we are talking with our clients about the potential role of hedge funds in an investment program. Hedge funds are not typically directly exposed to market movements, allowing them to earn a certain return stream more or less independent of the market as a whole. Of course, hedge funds come in all shapes and sizes, and have varying risk and return tradeoffs.