Feeling stressed due to a volatile market? Don’t let the ups and downs get you down.
Instead of reacting to every bump in the road, remember to focus on your long-term financial goals — everything else is just noise along the way.
These five tips will help you remain calm, stay financially cool and collected, and keep on track.
1. Remain confident in your plan. Rather than reacting to every little dip or upswing, stick to the plan that you’ve created with the help of a trusted financial advisor. Each quarter, sit down to re-evaluate your financial and insurance portfolio, and rebalance your asset allocation if necessary in order to stay diversified.
2. Keep your emotions in check. Though it’s easy to succumb to emotions — especially when the market swings wildly in either direction — don’t give into panic or euphoria by selling impulsively in either a down or up market. Instead, recognize the cycle of emotion, and avoid trying to time the market, as it’s not an effective financial strategy.
3. Revisit your expectations regularly. Sometimes markets are hot, and sometimes they’re really not — like we saw in the 2008 crash. If you pay attention to the financial media, you’ll notice these swings are emphasized, which can lead to unrealistic expectations. Realize that fluctuation is inevitable, and temper your expectations accordingly. If you have cash or certificates of deposit, consider investing these funds in products better suited to your needs and wants.
4. Work with your Certified Public Accountant to draw down retirement investment assets in the most tax-efficient manner. That means taking distributions from the least tax-efficient investments first. Minimizing your tax burden in retirement may help you sleep better at night!
5. Continually educate yourself. Research various investment vehicles, so you understand their risk and cost — and can make well-informed decisions about your finances. Remember, you can always turn to your trusted advisor with questions!
Post Excerpt
Volatile market conditions got you down? Fluctuations are normal; these tips will help you keep calm and stay on track.Sources: http://money.cnn.com/2014/02/10/investing/stocks-volatility/, http://www.nytimes.com/2014/01/28/your-money/forget-market-timing-and-stick-to-a-balanced-fund.html?_r=0
Listen to our podcast on the topic with Win Damon on WNBP.com and 106.1 FM radio WNBP in Newburyport.
Stuart Steinberg, CPA, MBA has been dealing with families and their money issues since 1988. He can be reached at 55 Pleasant Street Newburyport and at (978)864-9581 and stu@eaglerockwealth.net
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing.
This information is not intended to be a substitute for specific individualized tax advice. We suggest you discuss your specific tax issues with a qualified tax advisor.
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