May 30, 2022Money Education Financial literacy Economy
Don't Panic on Market Dips
Don't Panic on Market Dips
When I started my career in the late 1980s, all of the marketing material available at my firm talked about long-term investing, buy-and-hold strategies and the need to manage emotions through market downturns. Investors were certainly tried in the years to come with some of the most unprecedented historic dips we've ever seen. Over the last month, we've been tested again, with endless volatility that never feels good. So what can we do? And how do we help our clients stay the course and not panic?
Over the years, many large investment firms have tried to re-shape the meaning of long-term investing. And in the end, lifelong investing continues to be the most broadly available way across the world, to meet financial needs and goals. It's just that most people don't have the time frame, the temperament, or the training to invest this way. At Allan Bush Investment Team, we help you get there.
Big Picture Thinking
Plain and simple, a "normal" part of investing is understanding that market corrections and periodic market volatility happen. If you look at any "successful" investment, it tends to go up over time, but it never goes up in a straight line. Setting expectations and building strategies that help reduce or limit volatility are ways we help our clients stay the course. We're always on the other end of the line to chat or find ways to create positive momentum in the days to come.
Lessons From the Past
What have we learned through all market downturns? Even the bad ones? Life goes on, and the markets recover. We've also learned that when our emotions get the best of us, and we try to time the market, we often lose out. So how can we help? We offer solutions that help reduce panic, encourage a disciplined approach and look for ways to benefit from the opportunities market lows can present.
What Doesn't Help
Trying to Time the Market
As we mentioned above, trying to time the market rarely offers a benefit to your portfolio and is typically unproductive. What's more, it is almost always the driver of increased fear and anxiety related to your investment portfolio. And think about this. Trying to time it twice – once when you get in and once when you get out – seems even more unrealistic. Let us help you feel good about the overall plan in place and offer reminders that help you stay the course.
As everyone knows, this never helps in any life situation. And if we all had a crystal ball, the fear of regret wouldn't be part of our typical self-talk. Our Team will always look for productive ways to help reduce rumination or other less positive actions that create unnecessary fear and panic.
Watching Your Portfolio
Regardless of long-term market activity, investors are best served when they don't look at their portfolios too often. Normal fluctuations are expected and constant tracking; monitoring, or obsession over portfolio performance isn't healthy. As part of your investment care team, always try to keep in mind that we're diligently tracking and monitoring progress on your behalf, to ensure you meet your financial needs and goals as set out in your overall financial plan.
Listen, we're all human. And when under perceived threat, our flight or fight response is triggered. We understand, and we've been through 30+ years of helping clients stay calm and stay the course. Because in the long run, we know that it isn't not only best for your investment portfolio, it's best for you.