Staying calm during uncertainty
Historically the market shifts up and down, but having that knowledge may not calm your worries or fears during uncertain times. Even if you’re investing for the long term, have a diversified portfolio and feel like you’ve traditionally made all the right moves, you may find it difficult to keep your emotions in check.
If you find yourself or a loved one with feelings of being on an emotional roller coaster — now, during the upcoming elections or during any period of volatility — recognize and acknowledge it. People’s feelings, thoughts and beliefs about money are intensely personal and tied to a sense of security, stability and well-being.
To avoid reacting emotionally during a volatile market or difficult time, which can complicate your planning or even negatively impact your financial goals, here are some tips:
Seek advice
Work with your financial advisor who can share insights and experiences to help you make well grounded investment decisions.
Think big picture
Focus on your big picture, long-term wealth plan and avoid constantly checking your investment portfolio, especially if you’re checking it daily and that’s creating angst.
Remember your plan
Recall your goals, objectives, risk tolerance and investing timelines, factored into your personalized wealth plan.
Stick to the facts
Remember that wealth plans are driven by facts and figures rather than emotions, so don’t panic or act before seeking information and understanding the implications of your decisions.
Some specific strategies during market downturns
If you’re looking for more specifics on how to bolster your wealth or legacy planning during market turbulence, here are some topics to discuss with your financial advisor:
- Revisit your wealth plan to determine if any of your big-picture goals, risk tolerance or timeframes have changed.
- Retirees and near-retirement individuals should conduct an income check-up, revisit spending priorities and create a liquidity plan that includes an emergency fund and access to credit and lending.
- Consider charitable giving options that may provide income or estate tax benefits — in addition to the personal fulfillment from supporting a cause that matters to you.
- Consider opportunities within your portfolio for tax-loss harvesting.
- Consider a Roth IRA conversion or partial conversion.
- Look at your estate value and consider opportunities to employ during down markets.
Whether the market is bullish or bearish, your financial advisor’s advice can help move you toward presence of mind and away from emotional reactions.