With the 512-point drop on Wall Street yesterday, you’re probably feeling nervous about the market. When we see these setbacks, we need to fight the urge to flee from the market and instead refocus on our personal and financial goals. We also need to take a moment and reflect on the accomplishment you and others have been able to make over the past three years.
I’m not a market timer and I don’t ever attempt to predict where I think the market will be in two days much less two months from now. I believe that long-term investment strategies are in place to help provide the resolve and guidance during periods of economic uncertainty and economic prosperity.
Yesterday’s market decline is as emotionally devastating for you as it is for every investor and every advisor that works with individuals, families and businesses. When I see steep stock market declines, I know that it could potentially have an impact on some of the short and mid-range goals of my clients. It will also be important to review long-term time horizons over the coming months to reassess where we are in achieving our long-term goals if we don’t see an improvement in the market.
Over the coming weeks, I’ll be reviewing all of my clients’ short and mid-term goals, cash reserves and portfolio values. I’ll answer calls and emails to help calm fears and be ready to have frank discussions with some clients that may need to refocus some of their goals and savings efforts.
The purpose of investment diversification and allocating funds for various time horizons is to help alleviate some levels of market fluctuation from impacting all of our goals and all of our resources to meet these goals. Regardless of how well diversified we may be, we can still see steep declines in our investment portfolios that may require us to rethink or even reformulate our savings strategy.
In these times of market and economic uncertainty it is crucial to reassess your priorities and determine what steps you’re willing to take to fulfill your goals. It is easy to get caught up in headlines, fear, uncertainty and panic, but ultimately we need to refocus on our goals. By focusing on our goals, we’ll see that some of our desires are still possible to achieve and no adjustment is needed. We may see that a minor adjustment will keep us on track or only set us back by a few weeks rather than years. We’ll remember that after weathering the recession of 2008, we can still find ways to enrich our lives, meet our goals and fulfill our desires.
If you realize today that panic has overwhelmed you, step back and start to review your goals. Focus not only on your financial goals, but on your personal and career goals as well. Look for time to focus and reenergize with your family. Step above the noise of the market and put yourself back in control of your destiny and if needed pick up the phone and call your advisor.