My gut said to write and send this email today.  After 15 years of seeing the ups and downs of this crazy thing called the stock market, and learning more about the psychology of investing and how we as humans are wired, I tend to perceive when our clients may be feeling a little “unsettled.”

In my opinion, this is all normal “noise”, and nothing to worry about or to make big changes over- I just like to get ahead of things and keep clients grounded and thinking rationally and separating the emotional elephant in the room (i.e. Fear).

2017 was easy- market just kind of danced its way up month by month, and 2018 has been a roller coaster of volatility.  We are wired to only remember the most recent experiences in investing, so we (including myself) got spoiled with a quiet and upward path for the market, and forgot what the zig zags felt like.

So together, let’s take a deep breath, and cope ahead for volatility that I expect to be here for a while, both on the upside and downside.  Attempting to go all in or out back and forth into the market has been proven time and time again to be a losing game, and an (unnecessary) emotional punishment.  Instead, I encourage you to ask yourself these questions:

  1. Do I have an Emergency Fund (“bucket 1”) in the bank for 3-6 months expenses and any other immediate needs (i.e. taxes, car, etc)?
  2. Is a portion of my non-retirement investments (“bucket 2”) in fixed income and out of stocks? If so, I’ve got an additional layer of backup to my Emergency Fund should I need money.
  3. If the answer to 1 and 2 above is “yes”, then you can ignore the TV tickers and (annoying) commentary- and perhaps your statements- for a while and realize the values will go back up the same way they go down temporarily.
  4. Lastly, remember this- the one way to lose money in your investments is if you sell them while the market is down. So, you may not want to sell while the market is down…. You are welcome for that advice 😊
  5. If you are losing sleep and feel you MUST do something for your sanity, then you may want to avoid extreme decisions like going all cash. Consider, for example, if you are 75/25 stocks to bonds, maybe having us shift you to 50/50 for a while, that way you are still in the game and hedge your bets.

 
Enjoy this holiday season with friends and family, and if you need me or my team, we are here for you.  Not a day goes by I am not thankful to be doing what I love and what was my calling since I was 13 years old pushing a lawnmower, keeping up my spreadsheets, and saving and investing money.

Hang in there-

Posted in Retire While You Work

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