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By Joanne M. Welker, CFA, Senior Vice President and Manager, Advisory Services

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Volatility is upon us once again.   When the short-term investment charts start to look like roller coasters and sketches of mountain ranges, it is important to recall the work you have already done with your Financial Advisor.  The mutual efforts and planning you have put in place through careful and thoughtful development of a sound investment strategy is always key, but especially in times of extreme market movement.

There was (and still is) a long-term reason for the decisions you have made and put into action.  The daily market fluctuations caused by feelings about the Federal Reserve, China Trade wars, or tensions with Iran and Korea do not change these long-term strategies in your personal financial plan.  It is critical for investors to have the conviction to stick with the plan.  Remember, you and your Advisor have agreed upon an asset allocation of cash, bonds, and equity within your account(s).  This is the allocation that based upon your investment objectives and risk tolerance has been deemed appropriate to provide both the ability to ride out any such volatility along with the long term returns to meet your goals.

Be confident, remain calm and stay disciplined.  Market volatility never feels good, but it cannot be avoided as it is a fundamental part of investing.  Reframing how you think about it can be the key to both reducing stress and achieving financial success.  Call and talk to your Financial Advisor about any concerns you have, but just because the market is moving does not necessarily mean there is reason to react to it.

Asset allocation/diversification cannot guarantee a profit nor protect against loss in a declining market.

August 9, 2019 |