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Some thoughts on the markets


Let me tell you something you've probably heard before...

The markets tend to go both up and down.

However, when they go in any one direction for an extended period of time, we naturally start to expect more of the same.

For instance, when the markets have gone up for awhile like they have over the last couple of years, it's easy to become overconfident and take on additional & unnecessary risk. And when the markets have gone down as they have done more recently, we can lose sight of why we are invested the way we are or why we were comfortable taking on any investment risk to begin with.

Remember, historically speaking, markets have tended to go both up and down. It's one thing to know this. It's another thing to live through it and experience it emotionally. So the question becomes:

How do you navigate the ups & downs of your investments? Especially the downs!

In order to do so, you must know:

A) Why you're investing in the first place
B) Why you're invested the way that you are

If you haven't defined what you're attempting to accomplish before investing, you're likely to be disappointed no matter. After all, it's hard to know how you are doing if you don't know what you're looking to accomplish in the first place.

It becomes easier to decide how to invest and remember why you've invested the way you are when you know what you're trying to accomplish first. In an ideal world, you should be taking on the LEAST amount of investment risk possible that still gives you the BEST chance of meeting and exceeding your goals now and in the future.

When your investments are aligned with your specific goals, managing the ups & downs of the markets becomes a matter of monitoring progress and making the necessary adjustments. If the markets and your investments have been gone up for a while, rather than taking additional risk, this could present an opportunity for you to take some risk off the table or possibly realize a goal sooner. If the markets and your investments have gone down for a while, you might be surprised to see that a small adjustment such as saving a bit more or delaying a goal for a short period of time can keep you on track.

In summary, allow me to offer the following food for thought:

If you're invested without a game plan, you're never going to get where you want because you haven't decided where you are going.

It is hard for anyone to stomach a market drop, especially a prolonged one, even when you do have a plan in place. You must remember it's a necessary part of the journey to long-term success.

Rather than obsessing about something out of your control (i.e. the markets), focus on what you can control. Be proactive about monitoring your progress towards your goals. This will allow you to identify any necessary adjustments sooner and also make them as painless as possible.

Finally, ignoring your financial planning is not a plan. The short-term hassle of addressing your financial planning pails in comparison to the long-term damage you could be doing to your future lifestyle and overall well-being.

If I can help you with any questions on your planning or if you'd like to have a conversation, please don't hesitate to reach out.