When is the last time you took a look at how your investment portfolio is performing — and then did something about it?

If your answer is “Hmmm … not lately,” you’re not alone.

Too many people still have the old-school mentality that if they buy a diverse bunch of mutual funds and stocks — spreading out their money into several different buckets — they’ve done what they can to protect themselves against a big drop in the market. They buy and hope — and hope and hope — that by the time they retire, there will be more money in those buckets than when they started.

The Old Buy and Hold Approach Strategy

Who can blame them, when that’s been the prevailing investment theory for more than 60 years? Whenever the market starts to wobble, they’re told: “Don’t worry about it; stick with it. You’re in for the long haul.” Even billionaire Warren Buffett, the “Oracle of Omaha,” tells nervous investors not to watch the market too closely and says that buy-and-hold is still the best strategy.

It may not be. It may be an antiquated approach.

The markets have changed; we’re in a global economy. When something happens overseas — Brexit, for example, or debt or stock shifts in Greece or China — we feel it here. It may not make sense to buy and hold certain investments long term, possibly riding them as they go down. If you have stocks that appear to have run their course, why not take some of the chips off the table and pull some of the profits while you can? Sure, there are exceptions, but sometimes if you hold onto a winner too long, it can become a loser.

Many investors learned this lesson the hard way in 2008 and 2009.

People have come to our firm who used the buy-and-hold strategy then and thought they were safe. They experienced 30%, 40%, or even 50% losses during those years.

A Different Way of Approaching Investing

We talk to them about potentially taking a more active approach with tactical asset management.

Tactical asset management strategy is 100% math-based. It uses short-term and long-term averages to monitor the market, and when the two averages cross over, it’s a signal to become either defensive or bullish. Money managers use technical analysis to move to the sidelines into cash when the market statistical indicators look bleak and to buy back in when their market indicators improve.

Timing the market is never a sure thing, and investors who try to do it blindly can get burned if they let their emotions rule their decisions. However tactical asset management takes the emotional side out the market and focuses on the technical and fundamental aspects instead. That analytical approach can potentially eliminate riding a bull market too long

Get the Help You Need to Actively Monitor Your Portfolio

So many people get caught up in life and forget about their investment accounts. The years fly by, and they remain passive about their investments until retirement closes in. (Although many don’t lessen the risk even then – you see Baby Boomers who still have almost everything in a bunch of stocks and mutual funds that carry risk.)

Find someone who will help watch your money with you. Look for a financial adviser who is held to a fiduciary standard, who is legally and ethically bound to put your interests first.

Don’t put it off any longer. This bull market may be running on wobbly legs, and hope isn’t going to prop it up.

Past performance is no guarantee of future results. All investment strategies contain risk, including the loss of principal.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

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