Charting Your Course in a Turbulent Market
Navigating your financial future is difficult in the best of times, but when investment markets tumble, it can be even more nerve-wracking. After all, you know that your future depends on the financial decisions you make today. But how do you make advantageous decisions when the markets and the economy seem to be in a downward spiral?
Be Educated, Not Consumed with Financial Media
It is important to keep up with what’s going on in the markets. However, spending too much time on financial media sites can lead to information overload.
Too much media can also skew your perception. When you are reviewing your favorite sites, remember that sensational article titles get more views – especially if they’re negative. If you take this “bad-news bias” and compound it with social media algorithms designed to show you more of what you engage with, you could end up in a rabbit hole of doom and gloom.
If you find yourself in a dark hole of negative financial media, it can stoke your fears, increase your anxiety, and lead to poor financial decisions. When this happens, slow down, take a break, and contact an experienced financial advisor.
Financial media is tailored to a broad audience, so it often focuses on the average. On the other hand, an advisor can interpret the current market conditions and determine how they could impact your portfolio and your financial plan. An advisor who has navigated varying market conditions can put the current situation into perspective and help you navigate your personal decisions.
Focus on the Long Term, But Consider Short-term Adjustments
Your financial plan should quantify your long-term goals and chart a course for reaching them. But it should also be nimble enough to adapt to changing economic conditions.
You’ve heard the phrase “begin with the end in mind.” For financial planning, this can be adapted to say, “invest with the end in mind.” When it comes to investing, you should make decisions that get you closer to retirement goals. That goal could be retiring in 20 years, or it could be making retirement income last for decades. In either scenario, the goals are in the future – otherwise you wouldn’t need a plan.
When your goals are long-term, making radical changes in the short term is rarely a good idea. Instead, make drastic changes to your financial plan only when something fundamentally changes in your life – like your marriage status, employment, or family size. On the other hand, market fluctuations and economic shifts do not typically warrant an overhaul of your financial strategy. Your financial plan is created to help you reach goals over years or decades and considers short-term fluctuations in the economy and markets.
Just because you keep your focus on the end goal doesn’t mean you should ignore the current market situation. When markets are turbulent, there are often smaller changes you can make to insulate from risk or capitalize on opportunities.
A financial advisor will monitor your portfolio regularly for opportunities to reduce risk and increase returns. For example, if stock prices have fallen, your first inclination may be to sell everything to prevent further losses. In most cases, this is not the best choice for your long-term financial plan. Instead, a financial advisor might suggest moving a portion of your funds away from high-risk stock sectors, increasing your bond holdings, or keeping a higher amount of cash on hand to meet your scheduled withdrawals.
The adjustments your advisor recommends might seem small, especially if you continue seeing your total balance decline. However, small adjustments can help you adapt to current market conditions without jeopardizing your long-term plan.
Discuss Your Financial Worries with An Experienced Advisor
When your portfolio dwindles, it can feel like your safety net is disappearing. Don’t let panic over temporary market shifts drive you to make poor investing decisions. Instead, discuss your worries with an experienced advisor.
A relationship with a financial advisor can reduce financial anxieties and the poor investing decisions that result from them. Your experienced advisor should have navigated troublesome markets before, and they know how to react. So, trust them to guide you.
The most important thing you can do when investment markets are turbulent is find a financial advisor you can trust. With the help of an experienced advisor, you can understand how current conditions impact your plan, make any necessary adjustments to stay on the right path toward long-term goals, and have an outlet for discussing financial anxieties.
Financial Navigation Made Simple with Brookstone Wealth Management
At Brookstone Wealth Management, our focus is on coaching, teaching, and mentoring our clients. We take the time to understand your financial goals, and craft a plan for reaching them. Then, we help manage your financial anxieties and keep you on the right path to financial success. We call this Financial Navigation Made Simple. With Brookstone, you get a long-term financial partnership where both parties are focused on the same thing – your success.
Our proprietary wealth management program, Financial Fingerprint™ is quick to assemble, easy to understand, and simple to modify as your circumstances change. With Financial Fingerprint™, and a partnership with an experienced advisor at Brookstone Wealth Management, you can feel confident in the plan for reaching your financial goals – even when investment markets are turbulent.
Contact us to get started.