Extol Summer 2020 | Page 68

EXECUTIVE Strategies to Remember During Times of Uncertainty BY MICHELLE KONKLE, CFP®, CERTIFIED FINANCIAL PLANNER TM , 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. MICHELLE KONKLE, CFP®, Certified Financial Planner TM , Financial Advisor 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. 66 EXTOL : SUMMER 2020