Adrian Mastracci, portfolio manager at KCM Wealth Management, says “Savvy investors tend to their portfolios as avid gardeners tend to their gardens. With lots of care and special attention."

The dismal US job figures for August, along with the downward revisions of June and July, indicate the start of a trend. The US economy is ailing. Sentiment is negative. The "wall of worry" is on everyone's mind. Markets are nervous all over the world.

The recent data is far from the 150,000 jobs per month needed to keep pace with an expanding workforce. It will require a steep recovery in job numbers to overcome negative sentiments.

I've been cautious for some time. To me, the US job numbers confirm that more caution is good defense now.

The first tenet of my long-term portfolio management is that it's all about risk management. The other tenet is to always keep the first one in plain view. Especially, on days when fears are plentiful.

I am of the view that it's essential for investors to protect the accumulated nest egg during volatile times. Incurring a large loss is the biggest obstacle to portfolio growth.

Hence, trying to avoid a large loss is far more important than squeaking out every last ounce of performance. Of course, this runs counter to investors seeking the highest return for the least risk.

Portfolios can incur many types of risks. Investors ought to focus attention on three major factors for tolerating risks.

The ability to incur investment risks is associated with the investment time horizon. The willingness to incur the risks is associated with the investor profile. The need to incur risks is associated with the required rate of return.

I believe that investors ought to concentrate more on preserving rather than growing the portfolios in times like these. It's not always the popular view, but the smart view is to be cautious during the "wall of worry" times. There will be time to seek growth when the good times return.

Investing similarities with gardening

Gardening and investing have much in common. Savvy investors tend to their portfolios as avid gardeners tend to their gardens. With lots of care and special attention.

A few things come to mind. Be patient. Pull out the weeds. Plant more good stuff. Watch for bugs. Some pruning helps. Gardens need time to grow. All this can be applied to investing the nest egg.

Also keep a sense of humour. It comes in handy on those days when the markets seem to be imploding. Like last month.

The road to becoming an avid investment gardener starts by adopting a comfortable asset mix. Then diversifying broadly to the personal risk tolerance.

Real estate is about location, location, location. Portfolios are about quality, quality, quality. The more, the better.

Learn to take small losses so that the large one can hopefully be avoided. Rebalance periodically, say annually, by selling some winners.

Let the sound principles of money management be the guiding lights. Become an avid investment gardener.

Remember that this is an all-year job. It's not for just for special occasions or risky times. It never goes out of fashion.

My sage advice is to take the caution flag. Slow down a little. Portfolio building is a long journey.

Your comments are welcome.

NOTE: The information provided above is intended for general informational purposes only. It does not constitute advice for anyone's specific situation. Everyone should always first consult directly with their advisors to determine the appropriateness of any information contained above before taking any action. KCM Wealth Management Inc. assumes no responsibility for any loss or damage arising from the use of, or reliance upon the above information.