START
Should you adjust your investment strategy?
YES
NO
Is the market turbulent?
What does
Jim Cramer think?
Gotcha! Doesn’t matter.
Do you have an emergency fund?
Nice work.
NO
YES
Has your long-term financial situation changed in a good way (e.g. big raise, surprise inheritance)?
YES
NO
Has your financial situation changed
in a bad way (e.g. job loss, divorce)?
You should really put this whole adjust-your-strategy thing on pause and build up 3-6 months’ worth of expenses to help you handle life’s curveballs. Then come back to us.
NO
YES
You should consider adjusting your investment strategy. A significant change in income or savings can help you hit your goals faster. It may also give you more flexibility with risk: either you could take on more of it given your stronger financial foundation, or you may not need to take on as much to get where you want to be.
You may not need to adjust your investment strategy. This is where the emergency fund comes in. If your situation improves before that money runs out, you can often keep your investments steady. If not, you may need to move into more conservative assets, like cash. Once you recover you can rebuild your emergency fund and reassess your portfolio.
Did you just have a kid?
Did you just retire
NO
YES
YES
NO
Did you have a kid in retirement because you started an AI company and retired at 36?
NO
YES
You should consider adjusting your investment strategy. Big life changes are good opportunities to reassess your timelines, risk tolerance, and goals. New parents may want to direct excess savings into an RESP to maximize government grants and growth potential. New retirees may need to change their asset mix and think through the smartest, most tax-efficient way to start living off of their portfolios. And homebuyers may want to shift investments into more conservative options to increase the odds that their down payment money will be there when it’s needed.
That must be nice.
Did you decide to get married or buy a house?
YES
NO
Have you heard rumours of some new tax, law or other major change, and even though details are scarce, your friends are talking about making major adjustments to their portfolios in preparation?
NO
YES
You do not need to adjust your investment strategy. It can be dangerous to react to speculation. If you can, wait until you have real information. Otherwise, consult an advisor.
You do not need to adjust your investment strategy.
If you have a diversified portfolio that’s in line with your risk tolerance and timeline, then you are most likely on track.