"Sell in May and go away" might have a been a decent strategy this year given the ongoing swings in the market, which recently has been mostly down. Pressure has been coming from commodities as investors wonder what to do with their money.

Mom, for example has been sitting in cash, and while she isn’t happy about not getting much of a return, she believes it beats the alternative right now – a negative return. She isn’t a market timer and nor am I, but she has been paying attention to cries from the short sellers in the energy sector – and even those betting against the Canadian dollar.

There are many out there like her who believe the markets will continue to trend lower and have decided it was a safer bet to be an observer versus a participant.

Yet, not everyone feels that way and here is the irony. We have seen money continuing to move into high yielding bonds of some pretty risky companies as investors search for a better rate of return.

The real estate markets in Toronto and Vancouver continue to do well, and even the luxury goods segment of the economy is holding its own. In fact, I don’t get the sense that people are all that worried right now as we watch gold hit a low not seen in for years. However, on the back of the Shanghai Composite selloff of 8.5 per cent, gold was once again getting closer to the $1,100 an ounce level.

Having said all this, I’m not hitting the panic button. Given the number of companies reporting earnings this week, investors are likely shifting their focus to the bottom line.

While many companies have maintained their earnings by cutting costs, ultimately that strategy has to come to an end. We all know companies can only cut so much, and as a result, investors can’t afford to become complacent.

There are analysts who believe many stocks are getting expensive and fully valued, so rather than panic, this might be a time to realign your asset allocation to ensure your portfolio is aligned to you as an investor and your tolerance for risk.

This isn’t the time to have exposure to any one country, industry, company or even currency. When it comes to risk consider not only how much you are willing to lose, but how much you can afford to lose.

I’m reminded of a lesson from the past: No trajectory is straight up. Fifteen years ago this month Nortel hit an all-time high of $124.50. We all know where Nortel is today. Asset allocation is key and diversification matters.