In a word, yes.
If you feel your investments are too exposed to sharp downturns in the market there are a significant number of options you have to build more stability into your portfolio. One option applies to portfolios of Exchange Traded Funds (ETFs). Since ETFs are traded (much like stock shares) throughout the trading day, an investor can set a stop-loss order to sell out some/all of his/her portfolio should it drop below a pre-determined level.
In essence it is establishing a circuit breaker to trip a sell order if your portfolio is over-loaded with downward pressure. This approach can be very effective in protecting against sharp, unexpected market downturns. Of course, this isn’t the right idea for everyone. You must thoughtfully examine your personal situation to see if this strategy fits you and your personal financial goals.
If you would like details on how this might apply to your situation – or not – please contact our office.
If you have questions or comments, please send them to [email protected]