There’s no doubt that the markets are unpredictable. Just over 2 months ago officially marked the current period of growth as the longest-lasting bull market in history. A bull market is generally noted as any period of rising stock prices and can be measured as a time in which market values rise at least 20 percent after a decline of 20 percent. However, as the saying goes, what comes up, must come down and in the past few weeks, the market has people concerned. With large daily drops and sharp jolts, it can be nerve-wracking. But, if you’re in retirement or approaching retirement, it’s important to stay calm and not let your emotions affect your financial decisions.
First things first, have a plan that prepares for down markets and stick to it. You can also create an investment strategy that looks at your risk tolerance and sell thresholds so that you are prepared beforehand. Follow these tips to control your emotions when the market changes.
Stay focused and avoid panic by turning off the news. The TV stations don’t always help you make sense of the world, they tend to use alarming terms to focus on the declines. Instead, you should focus on what you know for sure. This is hard for most people, because we tend to dwell on what we don’t know and the questions that we have. However, you should remain at ease knowing that you need to be invested in order to achieve your goals and stocks are a great way to grow your portfolio over time.
Now that you’ve realized that stocks are important to your financial portfolio, try to avoid extreme changes to that portfolio. Doing something extreme can have long lasting repercussions. If you decide you need to do something, aim to make a smaller change that won’t fully disrupt your plan. Some people also consider rebalancing. Rebalancing your allocation to stock and bond funds for most means selling bonds and buying stocks. This isn’t easy to do when stock markets are in turmoil but can pay off in the long run.
Working with a financial advisor can also help give you peace of mind with your decisions. An experienced advisor can put things in perspective and talk you through any concerns you may have. A professional can also help you stick to your plan and stay focused on your goals because in retirement, emotional decisions can be costly.
You can’t outguess the market, but you can create an adaptable plan to accomplish your retirement goals. We can look at your whole portfolio and help you decide what moves are best for you so that you can achieve these goals. Click here to schedule your comprehensive financial review. There will undoubtedly be more ups and downs, but one thing that holds true is the need for a plan regardless of what happens in the market.