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5 'new normals' that control your finances

Volatility is market's stock in trade
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Volatility is market's stock in trade

The old normal: You invested. Your investments grew. You relaxed.

The new normal: You invest. Your investments rise and fall like Disney's Space Mountain ride, much like your blood pressure.

Solution: Stay focused on the long term. Richard Ferri, founder of Portfolio Solutions in Troy, Mich., and author of "All About Asset Allocation" says retirees getting adequate income, for instance, should not obsess on daily market swings when investing. "It doesn't matter if the chickens have gotten a little skinny, as long as they're still laying half-dozen eggs a day," he says.

If wild swings still have your stomach churning while investing, go with your gut -- within limits. For example, you could reduce your portfolio's stock holdings by 10 percent with more conservative securities. "It won't make that much difference to your portfolio, but you'll sleep better at night and it may stop you from selling everything," Ferri says.


 

 

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