By Kevin Grewal
The Associated Press has continuously been flooding news channels with indicators that economic woes around the globe are finally starting to ease, economic recoveries are in full swing and investment opportunities are igniting. However, many wealthy investors are reluctant to jump back into the markets and are remaining on the sidelines. Why?
The underlying answer is FEAR. A recent survey conducted and released by Barclay’s Wealth indicated that 88% of wealthy investors are aware that these opportunities exist, but 68% of them are staying away from them due to fear that the markets will take another dive.
So how does one overcome this fear? It is actually quite simple. Investors should stay diversified, perform due diligence on all of their investments, and have a strategy that they stick to.
In regards to diversification, utilizing exchange traded funds, ETFs, is a good low cost way to diversify. They offer exposure to hard to reach markets and sectors, in addition to offering transparency which enables investors to perform their due diligence.
The key in mitigating risk and overcoming fear is having a good exit strategy. Not only do exit strategies stop the bleeding when the markets take a tumble like the one witnessed last year, but they enable investors to sleep better at night and effectively manage their own portfolios.
The bread and butter behind a good exit strategy is the utilization of stop-losses. Stop-losses minimize portfolio losses, act as a backstop for gains, and can be easily implemented to an existing portfolio by going to www.SmartStops.net. Not only does www.SmartStops.net offer a service which provides investors with triggers on when to get out of a position, but this data is updated daily to reflect market fluctuations.