[SPONSORED] How market disruptions impact the construction of your portfolio, and how to do some well-adjusted long-term rebalancing: Wendy Myers from PSGWealth. Moneyweb
CIARAN RYAN: Recently we’ve seen some sharp downward moves in financial services stocks like those of Silicon Valley Bank, which is listed offshore, and Transaction Capital, which is listed on the JSE – each for its own unique reasons and each facing its own challenges. Silicon Valley Bank is now defunct, and Transaction Capital’s share price is down to levels last seen at the height of the Covid stock-market collapse.
I think what is very real and what we are experiencing now is that we are in [the grip] of unwinding the imbalances in the global monetary system after years of highly accommodative monetary policy. CIARAN RYAN: Okay, so don’t panic and [implement] proper diversification. Maybe just break that down a little bit – what proper diversification looks like.
So we typically recommend investors have not more than 5% of a total portfolio invested in these high-risk stocks, and in some cases actually avoid [them] completely because you need to consider your own risk profile and your time to retirement. WENDY MYERS: Absolutely. I think also don’t [have] knee-jerk reactions. I think as investors we are quite emotive, and we don’t like losses.