You're facing economic uncertainty. How can you navigate unexpected changes in the market?

Define and/or revisit your investment goal(s). It's easy to panic when you see your account balance drop from one month to the next, but long-term investing, like investing for retirement, is often much more about cash flow than it is about needing to increase your temporary account balance each month. After you define your goals, create a plan to accomplish that goal. Now you can assess risks and make changes if needed rather than reacting to news or opinions that may not impact your long-term goals.

To navigate unexpected changes in the market during economic uncertainty, stay flexible and adaptable. Keep a close watch on market trends and be ready to adjust your plans quickly. Diversify your investments and income sources to spread risk. Communicate openly with your team, and involve them in problem-solving to come up with creative solutions. Stay informed about economic news and seek advice from experts to make well-informed decisions. This approach will help you stay resilient and manage challenges effectively.

Diversification has been proven to be key to mitigate risks by numerous studies worldwide. However, many people still try to find the best asset to invest all their money. How many times people ask which is the best thing to invest money on? And yes, you can be lucky e.g. Bitcoin, NVIDIA, NN, but no-one has a crystal ball. So, is it better to play roulette or diversify? It all depends on the risk appetite, but FOMO (Fear Of Missing Out) should not cloud our decisions.

One thing I’ve felt helps to create diversification is to make sure your money is compounding from different sources. Dividends, rent, interest, royalties, appreciation, premium, return of principle and capital gains are all ways to reinvest income. This is especially useful when creating durable income streams in retirement.

What would be useful is to track early indicators of demand in the selected products and services. Eg the volume of production of semi-conductors that would go into electronic products as an indication of demand. The volume of container shipment of toys out of Asia to the USA for Thanksgiving and Christmas would provide earlier indication of retail sales for Black Friday etc

Navigating economic uncertainty requires a strategic approach focused on diversification and flexibility. By diversifying assets, you mitigate risk across different market segments, reducing vulnerability to unexpected changes. Additionally, maintaining a flexible portfolio allows you to adapt to market fluctuations. Prioritising long-term growth over short-term volatility hacks ensures sustainable performance (this is a personal bias, though). Such an approach not only stabilises returns but also positions you to capitalise on emerging opportunities, fostering resilience and returns amidst unpredictability.

A recipe to keep the long-term focus is to write down rules that you will not break. This allows you to take any impulsive or panic actions out of the equation when things go down. For instance, write down "if the market goes down by max. X%, I do not cash my position." This also allows you to take any bias out of the equation. Remember that losses loom greater than gains, so it is important to protect your phycology in volatile markets. Revisit your rules not more than once per year to ensure all newest information about your life and risk appetite are captured.

Le mieux c'est de l'anticiper dans une période calme, pour savoir exactement quels leviers activer en cas de turbulences. Ne partez jamais d'un rdv avec un conseiller quel qu'il soit (expert comptable, avocat, gestionnaire de patrimoine, banquier ou autres) sans avoir compris tous les tenants et les aboutissants de votre situation.