In my old working life I spent a number of years giving investment advice to pension plan sponsors and later to individuals. These turbulent times we are experiencing are like no others I ever experienced when I was in the business. People are very skiddish and some are on the verge of panic. I believe that if you can ride out the storm (and it is a big one) that you do that and when the market recovers, you should re-examine your risk tolerance. I think many people get overexposed to equities - the let it ride mentality and portfolios get out of balance. This is a real test of whether one has too much invested in risky assets!
I've always been a proponent of setting an asset allocation strategy first and utilizing lower cost index funds which automatic rebalancing. It doesn't help much if you've got too much risk than what you're comfortable with which leads back to having the right asset allocation strategy.
Anyway, people all over the world are in a similar boat. We'll have to stay tuned for the next episode.
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