20 Nov Episode 21- beware of the Black Swan
As an investor, you are bound to be wary of unforeseen occurrences such as the 1997 Global Financial Crisis, the recent Brexit or the current uncertain North Korean situation. These “Black Swan” events often result in a value erosion and massive hit to investor sentiment. On today’s episode, I am joined by Tim Farrelly, founder of Farelly’s investment strategy to discuss how to tackle events of this nature.
Investors might make great efforts to avoid taking a probably portfolio hit from a black swan event. However, often the only resort is staying put and adopting a long term investing strategy.
“When there are very visible risks that people refer to as black swans but are not black swans, they are actually are good time to invest” – Tim Farrelly
Today on the Finance Hour Podcast:
- Asset allocation depends on your risk appetite and current market valuations – you might run into a black swan event in spite of factoring these in
- If there is a visible market risk, it might be the best time to enter the market – markets might take off if the market does not succumb to the perceived risk
- Discussing the contrast between two major events: Brexit and the Global Financial Crisis of 1997
- A knee-jerk reaction and a short term approach is a poor market strategy – unless you are privy to some industry-specific knowledge, a long term investing strategy is recommended
- How can you lessen portfolio risk and be more resilient to global market risks?
- Will the expected tax rate cuts proposed by the Trump administration have a significant effect on markets?
Tim Farelly’s advice for investors:
- Asset allocation is a function of risk appetite and current market valuations.
- If there is a visible market risk, it might be sometimes, the best time to enter the market.
- A long term investing strategy is always preferred over a short term one.
Thanks for tuning in!
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About Reuben Zelwer
Reuben Zelwer established Adapt Wealth Management in 2011 to help time poor clients achieve financial freedom. For over 15 years, Reuben has helped professionals, executives, business owner and those approaching retirement make the most of their circumstances by making good financial decisions. Reuben’s professional practice is complemented by substantial voluntary work, which has included setting up financial literacy and savings programs in the local community.