March 9th marked the sixth anniversary of the current bull market. Since the average bull market lasts only 3.8 years, we think it may be time to take a look at client portfolios and decide whether it makes sense to incorporate additional safeguards.

Our last Navigator Insights discussed taking a personalized approach to risk management. Just as the markets go up and down, investors’ appetite for risk goes up and down. A personalized risk management approach will adjust and adapt to the changing markets based upon the desired outcome or goal of the client. There are a variety of ways to manage volatility, and each has its pros and cons.

Pros & Cons of Risk Reduction Tools

Time can manage volatility, since over long periods of time, the effects of market spikes are smoothed out. Using a bucket approach to asset management can help spread a client’s risk out throughout their investing lifecycle. But not every investor has the luxury of a long time horizon nor do they always have the emotional fortitude to just “stick it out” in a bear market.