1. Don’t let daily events overly influence your decision making.It is easy to become overwhelmed with the headlines of the day, particularly if seemingly bad news is piling up and having a negative impact on the markets. Keep in mind that we’ve seen many periods where markets suffered sharp downturns. Yet historically, markets as a whole have always recovered any ground lost during short-term setbacks. Headlines come and go, but building an effective, long-term strategy should remain your primary focus.
2. Re-assess your risk tolerance.If you’re feeling uneasy about market volatility, you may need to take another look at the level of investment risk with which you are comfortable. Periods of market volatility are often a true test of the ability to withstand temporary setbacks to your portfolio. Another consideration is your time horizon. For example, if you are within five years of retirement, you may want to consider scaling back the level of risk in your portfolio to protect against the impact of a major downturn occurring at the wrong time — just when you need the money for retirement.
3. Stay properly diversified.
4. Continue or expand systematic investments.While volatile markets can be concerning, they shouldn’t impact your ongoing investment plans. If you make regular contributions to your workplace savings plan or other accounts, it’s best to maintain those investments. If markets go down, your regular contribution will purchase more shares of the investment. That could benefit you over the long run. If you have the ability to save more through systematic investing, don’t be hesitant to boost those amounts you sock away regularly.
5. Review your strategy with your financial advisor.It can be helpful to discuss your financial situation in the context of today’s markets with your financial professional. They will be able to help you assess your current position, if your portfolio carries an appropriate level of risk, and whether there may be investment opportunities you should consider today. Having a conversation about the best way to approach today’s markets can make a difference and can help keep you on track to achieve your most important goals. Ellie Tobin Stubbs, AWMA, BFA, is a financial advisor with Ameriprise Financial Services, Inc. in Barre. She specializes in fee-based financial planning and asset management strategies and has been in practice for 20 years. To contact her, ameripriseadvisors.com/ellie.stubbs. 802-622-8060.
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