Investing = Volatility. Remember, Stick To Your Plan

It’s easy to get nervous when markets become unsettled. We are here to guide you through these emotionally difficult times and put you in the best possible situation to realize your financial goals.

Remember, market turmoil is an unavoidable aspect of investing. Financial markets have moved dramatically as long as stocks and bonds have existed. It is this volatility (risk) that provides the reward of positive returns (growth). When times are good it’s easy to become fixated on the “average” return you can expect and any deviation from this can cause concern. However, history tells us that we should never actually expect average returns in any given year. In only 6 of the past 90 years have annual returns fallen within 2 percentage points of the annualized return.

It’s normal to worry when financial markets fall. The important point to remember is that markets have inevitably bounced back. The worst potential mistake one can make is to sell because of volatility. Selling during a down market can not only guarantee at least a short-term loss, but also makes it nearly impossible to know when to get back into the market. And when you wait too long to get back into the market you could end up forfeiting significant gains.

How did most people react when the stock market started its nose dive in 2007?

That long, extreme market decline was certainly unnerving. However, for those who were disciplined and stayed the course they were reward by recouping all their losses and more. This graphic provides a snapshot of the performance of the Dow Jones Industrial Average from 2007 to 2014, which illustrates the markets’ ability to recover.

Remember the big picture and stick to your plan

We have designed your portfolios to help withstand the impact of inevitable spells of market volatility. Resist the urge to make drastic changes to your investment plans in reaction to market moves. Instead, stay focused on your goals and the value of investing in a diversified portfolio over time.