By Dave Coen
If you have seen or heard any news in the past two days, you are well aware of the market sell-off going on. Often, when headlines declare market losses, emotions run high and it’s hard to keep perspective. Concern is definitely warranted, but I want to give you some ways to keep a level head when market fluctuations, like the ones this week, get you worried.
Questions To Ask
When you hear that the Dow has dropped 1000 points due to the intensifying Coronavirus situation, (1) here are some questions to ask yourself before you make any changes to your portfolio:
- What is the root cause of the market turmoil?
- Is there a change to the fundamentals in the market or is this from an outside influence?
- When do I need my money? Until I sell anything, I have not gained or lost anything.
- Should I sell when the market is up or down?
- Do I know, without a doubt, what will happen tomorrow, next week, or next month or am I just guessing?
- Am I trusting the pundits on TV who so often get it wrong? – see links below.
- How does this compare to what my portfolio has done in the longer term? Even after dropping dramatically for the past two days, at the time of writing this, the Dow is still up 4.5% over the past year.
- What has happened in the year or two after the past two major market drops? Those who panicked and took their money out of the market lost out big time.
- What were the initial goals discussed with my advisor? Are we still on track to reach them?
- Do I have a properly diversified portfolio? If I want to follow the market all the way up, I need to be prepared to follow it all the way down too.
- Could this be an opportunity to refinance my mortgage? The 10-year treasury rate is the lowest that it has EVER been. If your rate is 4% or above, this might be a good time to consider a refinance. Feel free to contact me to run some numbers for you.
- Have I looked at what bonds have done? For those with a properly diversified portfolio, there is a good chance that your bond portfolio INCREASED in value over the past 2 days.
Ignore The Headlines
Often the TV and other media pundits create panic with their predictions, but the truth is that most get it more wrong than right. Read this article, and this one too, to see what I mean.
The key takeaway is that more important than avoiding every market downturn is sticking to your long-term strategy and keeping your emotions in check. If you want to make sure your portfolio is built to withstand whatever the markets throw at it, I’m here to help. Email me at dcoen@sageviewadvisory.com or call 800-814-874 to pursue a better investment experience.
About Dave
Dave Coen is a Financial Advisor with SageView Advisory and the CEO of College Planning America. Along with his retirement financial industry experience, he is a College Planning Specialist. He works closely with individuals and families to provide comprehensive financial planning that addresses all elements of their financial picture. Learn more by connecting with Dave on LinkedIn.
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This material is designed to provide accurate and authoritative information on the subjects covered. It is not however intended to provide specific legal, tax, or other professional advice. For specific personal assistance, the services of an appropriate professional should be sought. A diversified portfolio does not assure a profit or protect against loss in a declining market.
SageView Advisory Group, LLC is a Registered Investment Adviser. This report is for informational purposes only and is not a solicitation to invest. Advisory services are only offered to clients or prospective clients where SageView Advisory Group, LLC and its representatives are properly licensed or exempt from licensure. Past performance is no guarantee of future results. No advice may be rendered by SageView Advisory Group, LLC unless a client service agreement is in place. CA insurance license #0G82578
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