BY MICHELLE KONKLE, CFP®, CERTIFIED FINANCIAL PLANNER, FINANCIAL ADVISOR
OVER THE PAST MONTHS WE HAVE SEEN VOLATILITY RETURN TO THE MARKET. THIS VOLATILITY IS SOMETHING THAT MANY HAD FORGOTTEN THE FEELING OF WHILE LIVING THROUGH THE LONGEST BULL MARKET SEEN IN OUR HISTORY. MANY HAVE ONLY SEEN A BULL RUN IN THEIR INVESTING LIVES. WHILE YOU MAY BE CONCERNED WITH THE BALANCE OF YOUR 401K AND OTHER INVESTMENT ACCOUNTS, IT IS IMPORTANT TO REMEMBER THESE FEW POINTS BEFORE REACTING.
1. Humans are irrational creatures. Time and time again we are told to buy low and
sell high. However, when we start to see the balances fall it is human nature to want to
reduce your loses by moving into ‘safer’ assets. Unless you are in dire needs of the funds
within six months, this is not typically an advisable plan. Studies have shown that time
in the market is better than timing the market. If you exit the market during a downturn
and wait for the ‘right time’ to get back in, chances are you have already missed some of
the best days of the recovery. When navigating a bear market, think of it is fighting a fear. Stay calm and don’t make any sudden moves.
2. Diversification is key in any market cycle. By diversifying your assets, you will be
able to limit potential negatives felt when one invests in only one security or industry.
3. Keep investing. While it is difficult to watch the balance of your 401k fall, you must
remember that this is the best time to invest. Depending on an individual investor’s
situation this may be the time to continue contributions and even possibly increase
contributions. Buying during periods of volatility can have tremendously positive
impacts on your portfolio later in life. We often recommend that investors dollar cost
average due to the uncertainties and inability to time the market. This means that they
will systematically invest a certain amount over a specified period. Please contact us or
your financial adviser to discuss if this option is right for you.
4. Don’t invest money you don’t have. While it is great to increase your
401k contribution or start to invest in your favorite store/restaurant, etc.
when their stock price falls. Remember to only invest what you can afford
to lose. If you are not comfortable with the potential of losing the money,
then do not invest it. Now more than ever, it is crucial to have your 3-6
months of emergency reserves set aside. These funds are not to be used for
5. Consult with a financial professional. When trying to navigate the
waters of investing, consulting with a professional is the nest idea. Most of
us have been through this before and can provide to you real life examples
and industry respected resources as we help you develop a financial plan
to not only navigate the current state but achieve your future goals.
While “stay the course” may be the last thing you want to hear from your
financial advisor, it is oneof the pinnacles of a long-term strategy. If you
would like to discuss investment options or create afinancial plan of your
own, you can reach us at (812) 913-7701.
This report was prepared by Axiom Financial Strategies Group, a federally registered investment adviser under the Investment Advisers Act of 1940. Registration as
an investment adviser does not imply a certain level of skill or training. The oral and written communications of an adviser provide you with information about which
you determine to hire or retain an adviser. This is prepared for informational purposes only. It does not address specific investment objectives, or the financial situation
and the particular needs of any person who may receive this report. Neither the information nor any opinion expressed it so be construed as solicitation to buy or sell a
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