What to do in Difficult Markets?

When the financial markets are sporadic, the last thing you want to do is overact emotionally. You may think the rational thing to do is to sell your investments, get out of the market and wait for it all to end.

There are two good reasons why this is a not a smart move. First and foremost, you are selling low. Secondly and most importantly, you don’t know when to start investing again. History has shown us that once the market bottoms, the recovery is very fast, and by the time you realize the worst is over, you have missed out on great opportunities which were on the rise.

Remember that, on average, the market is hit with a bear market every four to five years. What you do during the bad times is what allows you to make money in the good times. Just ask Warren Buffet. He finds all his great opportunities during the bad times and invests. He knows these downturns allow him to buy low, and then sell high during the good times. Keep in mind that the economy has been bad before and will be bad again. John Templeton put it best when he stated that the worst four words in investing are, “this time is different."

So what can you do to make it through difficult markets with your sanity intact and not pull out all your investments in frustration? There are several sensible actions you can take to help maintain your balance.

First, ignore it. Don’t just turn it off, but always be mindful that the news media is going to make situations seem worse than reality; that is how they make money – they need “eyeballs” to sell advertising.

Next, evaluate your risk. What does that mean? What will keep you up at night? If you’re loosing sleep over your investments, then you either have too many equities, you don't Trust your present advisor or don’t have a Financial Roadmap – or ALL THREE!

Finally, re-evaluate your Financial Roadmap. Where are you today? Where are you trying to get? What's the plan to get there? If you don’t have one – get one! You can get a FREE Roadmap on my site HERE.  A Financial Roadmap helps guide you through the tough times. You can’t predict the future, but you can plan for it.  Our goal is to provide independent financial strategies available for everyone – no strings attached.  Let us know if we can help you & your family.