By: Colleen Weber
News and Updates
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By Colleen Weber, CFP®, CPA
You watch the market price of your investments spike up and dip down erratically and it’s got you worried. I get it. It’s tempting to want to pull out of the market the second you see things going south. But honestly, market volatility is unavoidable. So what do you do during these uneasy times? To help you prepare for the inevitable ups and downs of the market, follow this three-part plan.
Keep Your Long-Term Goals In Mind
Short-term market volatility is completely normal. Outside forces can cause the market to spike up and dip down. Some of these outside forces may be businesses releasing quarterly reports, elections, or breaking news. Of course, there’s no way to guarantee what the market will do in the future (I’m definitely not psychic). But over the past four years alone, the market has improved by 20% overall—even with short-term volatility. (1)
Sure, the market may dip in the short term, but it’s important to keep your long-term goals in mind. It’d be easy to stash your money in a CD or money market account where you earn a predictable, let’s say, 3%. But remember, you’re doing this to achieve a greater level of financial success.
Use The Market To Your Advantage
If market volatility is stressing you out so badly you’re losing sleep, tweak your portfolio. A well-diversified portfolio looks different for every single person. A 30-year-old who won’t retire for another 30+ years needs a completely different portfolio than a 65-year-old who’s about to retire.
Rebalancing your portfolio while the market is volatile may allow you to purchase investments that may have otherwise been out of your price range. A well-diversified portfolio means it’ll be easier to survive a volatile market—and you’ll get more sleep at night.
Seek Help From A Professional
Dealing with your own money is emotional. After all, it’s taken you years to get where you are, and you don’t want to see it all crash and burn overnight. When the market is volatile, it’s important to seek help from a professional financial advisor.
As a financial advisor, I act as an unbiased third party who can reevaluate your portfolio and recommend any rebalancing that needs to be done. I also take into account your short-term and long-term goals to help figure out the right portfolio mix for you. Don’t let those short-term dips in the market stop you from reaching your long-term goals. Book a free introductory meeting online or call me at (952) 470-0750.
Colleen Weber is a fee-only financial advisor, CERTIFIED FINANCIAL PLANNER™ professional, and CPA with more than 15 years of financial planning experience. Providing comprehensive financial planning and wealth management, she specializes in serving clients nearing retirement, retirees, busy professionals, and women. She is passionate about developing financial plans that save clients on taxes, and investment strategies that help them pursue their goals. Learn more about Colleen by connecting with her on LinkedIn or booking a complimentary phone call meeting.