As the days grow longer and warmer we have more time on our hands to review where we stand with our investments. Now is a good time to review how the prior year went and what is currently going on. Review a broad picture of the markets as well so you have the full picture when assessing your investments.
While reviewing you may notice the ups and downs that came along during that time in the markets and how no two days were alike. It is hard to be calm, cool, and collected when the markets change so abruptly and frequently, but we will try to give you a few tips to mitigate heating up during these changes.
Asses where you receive your market information and news. Is this a reliable source? Is the source only focusing on one particular index? Are you comparing your portfolio to an index that is in the appropriate risk category or to the ones that are shown most often? Knowing where and what to look at will help ease some of the blood pressure spikes. Ensure you are viewing a reliable source that is unbiased to certain political parties or companies and focus more on what is best. Do not try to compare yourself to an index that is volatile or aggressive when you are on the conservative end of the investing spectrum, it will only set you up for disappointment.
Understand and be ok that history does repeat itself but it may look different each time. You cannot prepare for the outcomes that may occur because they may be different than expected. Your vision may include a retirement where money never runs out, but inflation gets the better of you and you live past your money. There are unknown risks in the market and sadly no one has a crystal ball to predict what will happen. To keep cool in these situations it is best to adapt to what is happening by avoiding single points of failure. Diversification is a great tool to utilize when there are market changes that are different. Recognizing trends when holding cash or getting into high-yield vehicles will potentially yield better results than equities.
Do yourself a favor and keep looking to a minimum. Markets will fluctuate daily, even down to the trillionth of a second this year and there is nothing you can do to change that. Looking at things that often can create a psychological effect on your mind giving you highs and lows, thus altering your mental state. Once the habit is formed it can be difficult to break. If you are in this habit of daily, start slowly by looking every other day, then weekly, monthly, and then quarterly. If things occur in the timeframe between quarters that need addressing your advisor will contact you and have a conversation about the game plan. Do not heat up to a point where you are steaming out of your ears as it is not mentally sustainable.
Written By:
Erin Watkins
