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It's hard not to panic when markets make sudden, large moves. Greed and fear are natural human emotions that, if given free rein, can lead investors to buy high and sell low. That can be a recipe for wealth destruction.
The time to handle market fluctuations is before they happen. Planning starts with an understanding of how your portfolio will react to volatility, and then making moves to restructure your wealth to fit your risk profile. The fact remains that the financial markets are frequently beset by challenges. And often (like what we are seeing in today's market) it's not a matter of if, but when. Your plans and expectations for the future shouldn't have to depend on daily fluctuations.
The first course of action is to stay calm. Which may be hard to do when you see what the downturn is doing to your investments. However, right now is the perfect opportunity to take a look at your investment portfolio to see if it fits with your goals.
Diversifying your investments across a broad set of asset types is a central feature of your wealth planning. There are three main consideration to bear in mind when developing a sound financial strategy:
Knowing your tolerance to risk, stage of life and need for liquidity should shape your asset allocation so that you can tolerate volatility without it triggering sudden, unplanned reactions.
When you work with a highly skilled wealth advisor, you have access to planning tools that show how your portfolio might react to various market scenarios.
Contact me today by filling out the below form. I'm happy to work with you to develop a custom plan or restructure your portfolio to match your risk profile. Together we'll reorganize your assets to help provide confidence in periods of market volatility.*
*Securities offered through LPL Financial, member FINRA and SIPC. Investment advice offered through Robert Farmer, a registered investment advisor. Robert Farmer and RL Farmer Wealth Strategies are separate entities from LPL Financial. There is not guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification and asset allocation do not protect against market risk.