What to do with investments before going on holiday?
Investments
Posted by MoneyController on 02.08.2024
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August is a month that many people devote to holidays: but what to do with investments?
In ‘Affari&Finanza’ (‘La Repubblica’) Luigi dell'Olio outlines a situation that many investors are likely to encounter in the coming weeks: what to do with their investments before leaving for their holidays, which traditionally are taken by most people in August. L'Olio's first point is that each investor should find their own solution, but it is still possible to outline some of these possible scenarios.
The first scenario is that an investor goes on holiday without worrying about the state of his or her investments. In this regard, dell'Olio reports on the opinion of Rocco Probo, analyst at Consultique (a financial consultancy company): Probo believes that there are cases in which it is not necessary to check one's investments before going on holiday; in other cases, however, it is preferable to check the state of one's investment portfolios so as not to be faced with nasty surprises once one has returned from holiday.
Another possible scenario is to liquidate one's investment. For Probo, this is a choice that brings with it not insignificant disadvantages: in particular, liquidating your investments means that you can no longer make use of compound interest, i.e. the sum of the interest earned on the invested capital and any returns you may have earned in the meantime.
Dell'Olio also reports on some considerations by Moreno Zani, CEO of Tendercapital: Zani explains that the check-up of a portfolio consists of assessing whether the asset allocation respects the investor's risk inclination. The example Probo gives is a balanced portfolio that, on the basis of the rise in equities in recent months, has become unbalanced in favour of the equity component, thus increasing risk. In general, Probo again emphasises, it is often useful to rely on a financial advisor with the right professionalism for a check-up. In this sense, effective planning - concludes dell'Olio - is also ‘usually’ accompanied by ‘good results’.
Read also:
Why does it make sense to diversify your investment portfolio?
How is the risk of an investment determined?
Does the sum of the risks of several portfolios result in the risk of the entire portfolio?