Do not get affected by market fluctuations

Although an investment should be a calculated action designed to provide the highest possible returns, most investors recognize that rationality can be lost when the markets start to fluctuate.

Investment experts will, however, advice to have ice in your blood and avoid shifting market positions too often. Likelihood to dispose at the right time is in fact negligible.

Have you already established a diverse portfolio, you're well on our way to withstand market fluctuations. It is extremely difficult to time when to overweight assets and categories. Therefore, most investors are better served by a group portfolio, which can then be adjusted slightly so that the returns do not disappear into transaction costs.

You should only convert the portfolio, if for example the day you need the money is getting closer, and if your appetite for risk is changing permanently. It cannot be denied that it can be an idea to adapt to structural trends in the marketplace.

The famous American investor and author of books on investing Peter Lynch has said that there has been lost more money trying to predict or attempt to ward off market fluctuations than there has on the market fluctuations themselves.

If you're still trying to beat the market, your personal temperament has decisive influence on the outcome. Are you too aggressive, you're easy to lag behind the market, which you will always lose on. Are you too passive in your investment behavior, you risk that your portfolio loses relevance.

Give your portfolio an overhaul
At times there may come changes in the market or your investment strategy, which gives rise to an overhaul of your portfolio. This should be done once or twice a year, unless significant changes occur in your investment strategy.

Investors should not schedule the rebalancing of their portfolio too tight. Instead, you can switch over your progressive funding and thus save transaction costs and perhaps even avoid realizing capital gains taxation.

Nonetheless, you should annually inspect your portfolio. For example, if the proportion of bonds has moved 5-10% away from its initial objective, it makes sense to make changes. Simultaneously, you can assess whether the portfolio's risk has changed.

When and how often you make changes to your portfolio is a question of temperament. For some investors trying to predict market fluctuations is the part of the joy of investing. But if you go solely by the highest return for your investment, the experts’ advice that you make as few changes as possible.

• Do not get affected by market fluctuations. Instead preserve focus on the long-term returns
• If the time the investment will be paid out is getting closer, it makes sense to reduce the risk, for example by increasing the share of bonds
• Be aware if your investment strategy has changed, and reconsider whether there is consistency between strategy and portfolio at least once a year