It is not a matter of if general equity markets will correct but when and by how much. The real question we need to ask ourselves is how it will impact me and my investments and are we prepared. If we are properly allocated for our needs, and our risk tolerance, than market volatility – either up or down – should not affect us financially. Properly planning, however, is not just about allocation and analysis but also being psychologically prepared for the inevitable portfolio fluctuations.
We are inundated with information on the radio, TV, internet, newspapers and other media. All of these sources are competing for our attention and will generally focus on the dramatic, short term and negative. Much of the information may be misleading, incomplete or totally false. Ultimately the goal for much of the media is to sell advertising, not to provide us with unbiased information.
We are planning and investing for the rest of our lives, and in many cases beyond our lifetime, as we plan for our children. Your financial planning must be based on your needs and objectives not short term market or economic changes. A proper financial plan takes into consideration the normal market gyrations and even unforeseen issues that arise both personally and also more generally. Your financial advisor plays a key role in helping you define what your vision is and then developing a plan to meet it. But this is just the start – your plan is a dynamic document and must continually be monitored and updated as your needs and goals change.
We work with you to help figure out what is important and then develop, monitor and update a plan to achieve your goals. Your planning is based on you and your vision – not short term market conditions.
This month we have heard about the issues with China, a flood of refugees from Syria in Europe, potential interest rate increases by the FED and terrorism abroad and at home just to name a few of the news items. As we get closer to the 2016 election we believe politicians will focus on all that is wrong, or potentially wrong, to help promote themselves and their solutions. The media will shout the refrain – ‘This time it’s different’. The reality is that there have always been challenges for individuals and our society and as we become more global both in terms of information and as a society we will hear about new issues. Ultimately, those who succeed will rise above the noise and focus on what’s important to them. There are things we can control, and things we cannot. By utilizing a disciplined approach to planning, monitoring and updating our portfolios we can rise above the noise. As always please contact us with questions or whenever we may be of service to you, your family or your friends.