Home Guides & Resources chevron_right Financial Planning chevron_right Investing for Life Financial Planning in Volatile Times Published March 13, 2020 General financial planning wisdom says that it’s important to “stay the course” during times of market volatilityA measure of how large the changes in an asset’s price are. The more volatile an asset, the more likely that its price will experience sharp rises and steep drops over time. The more volatile an asset is, the riskier it is to invest in.. But keeping the tiller steady is a lot easier said than done in stormy markets like the ones we’ve experienced in recent weeks. Here are four tips to help you to steer straight and stay afloat when the markets are roiled. Review your goals. If the life events you’re planning for are 10-plus years away, a sequence of down days in the market is unlikely to imperil your ability to reach your goals. But pulling your investments out of the market during times of distress could. Simply put, by standing pat through a period of decline, you’ll be positioned to fully participate in the rebound whenever it arrives—instead of committing the classic mistake of selling low and buying high. Shorter-term goals are a slightly different story. If you have funds you expect to need in the next year or so, that money is typically best held in cash so that it isn’t affected by the whims of the stockA financial instrument giving the holder a proportion of the ownership and earnings of a company. market’s day-to-day moves. Keep your emergency fund robust. No matter what your financial goals are, it’s important to have enough rainy-day savings to weather an unexpected situation. Your emergency funds should never be invested in the stock market. We recommend a simple checking account with your local bank or even a money market account with check-writing privileges. Diversify. Nobody knows which way the market is going to turn from day to day. That’s why effective portfolio diversificationA strategy for managing investment risk by investing in a mixture of different investments. Since different asset classes face different risks, even if one type of asset declines in value, others may not. is your best friend when it comes to warding off the inevitable ups and downs of the stock market. At Adviser Investments, we believe that a well-diversified portfolio made up of domestic and international stocksA financial instrument giving the holder a proportion of the ownership and earnings of a company. as well as a broad swath of bondsA financial instrument representing an IOU from the borrower to the lender. Bond issuers promise to pay bond holders a given amount of interest for a pre-determined amount of time until the loan is repaid in full (otherwise known as the maturity date). Bonds can have a fixed or floating interest rate. Fixed-rate bonds pay out a pre-determined amount of interest each year, while floating-rate bonds can pay higher or lower interest each year depending on prevailing market interest rates., depending on your goals and risk toleranceThe amount of loss an investor is willing to absorb in their investment portfolio., helps smooth the ride when markets get choppy. Talk to your adviser. StockA financial instrument giving the holder a proportion of the ownership and earnings of a company. market drops aren’t easy to take no matter how experienced of an investor you are. Fear is a strong emotion. That’s where we come in as advisers. Our seasoned team of wealth managers has helped hundreds of clients “stay the course” and remain focused on long-term financial goals through some of the most dramatic market corrections in history. We are happy to assist during periods of volatility such as this. By standing pat through a period of decline, you’ll be positioned to fully participate in the rebound whenever it arrives—instead of committing the classic mistake of selling low and buying high. One final thing to keep in mind: All bargain-hunters love a good sale—and stock buyers are no different. Our active portfolio managers view stock market drops as a massive opportunity to add values to their funds. Even the worst market storms don’t last forever. Please give your adviser a call to get their perspective on the situation (for example, if you’ve been considering converting your traditional IRA to a Roth IRA, this could be good time to save on the taxable gains generated by the move). Our experience shows that bear marketsA period in which stock prices decline significantly from recent highs and remain below previous high marks for weeks or months. Generally, a decline of at least 20% in stock prices is considered the threshold marking the start of a bear market. are often viewed as scary and heart-stopping when they occur but when they are finally in the rear-view mirror they are seen as opportunities. Please call us if you are uncertain about your portfolio positioning or if you’d simply like to talk. We stand ready to answer any and all of your questions and concerns. About Adviser Investments Adviser is a full-service wealth management firm, offering investment management, financial and tax planning, managed individual bond portfolios, and 401(k) advisory services. We’ve been helping individuals, trustsA legal document that functions as an instruction manual to how you want your money managed and spent in your later years as well as how your assets should be distributed after your death. Assets placed in a trust are generally safe from creditors and can be sold by the trustee in short order, avoiding the lengthy and costly probate process., institutions and foundations since 1994. Adviser Investments and its subsidiaries have over 5,000 clients across the country and over $8 billion in assets under management. Our portfolios encompass actively managed funds, ETFsA type of security which allows investors to indirectly invest in an underlying basket of financial instruments (these may include stocks, bonds, commodities or other types of instruments). Shares in an ETF are publicly traded on an exchange, and the price of an ETF’s shares will fluctuate throughout the trading day (traditional mutual funds trade only once a day). For example, one popular ETF tracks the companies in the S&P 500, so buying a share of the ETF gets an investor exposure to all 500 companies in the index., socially responsible investments and tactical asset allocation strategies, and we’re experts on Fidelity and Vanguard mutual funds. We take pride in being The Adviser You Can Talk To. To see a full list of our awards and recognitions, click here, and for more information, please visit www.adviserinvestments.com or call 800-492-6868. This material is distributed for informational purposes only. The investment ideas and opinions contained herein should not be viewed as recommendations or personal investment advice or considered an offer to buy or sell specific securities. Data and statistics contained in this report are obtained from what we believe to be reliable sources; however, their accuracy, completeness or reliability cannot be guaranteed. Our statements and opinions are subject to change without notice and should be considered only as part of a diversified portfolio. You may request a free copy of the firm’s Form ADV Part 2, which describes, among other items, risk factors, strategies, affiliations, services offered and fees charged. Past performance is not an indication of future returns. Tax, legal and insurance information contained herein is general in nature, is provided for informational purposes only, and should not be construed as legal or tax advice, or as advice on whether to buy or surrender any insurance products. Personalized tax advice and tax return preparation is available through a separate, written engagement agreement with Adviser Investments Tax Solutions. We do not provide legal advice, nor sell insurance products. Always consult a licensed attorney, tax professional, or licensed insurance professional regarding your specific legal or tax situation, or insurance needs. 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