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How Do You Handle a Volatile Market?

What to Do with a Volatile Market

There are pros and cons to market volatility, but as you begin to near retirement, your thoughts on the matter may begin to change. With quickly changing price movements there is a chance to make money quickly, but also less time to get back on your feet after market crashes. So, with time ticking on your retirement, how can you plan to handle market volatility and protect your financial well-being in the case of a quick downturn?

The Federal Reserve’s Effect on the Market

Due to surging inflation and in an attempt to slow it down, The Federal Reserve recently announced that the federal funds rate is expected to raise soon. This change could result in a volatile market, especially after the record highs we witnessed last year. Raising interest rates multiple times and narrowing its asset purchases could mean a poor response from the market in 2022. In an attempt to continue to slow inflation, The Federal Reserve could also raise rates more quickly than initially anticipated, leading to a potentially poor market performance due to the ambiguity of the situation.

Volatile Market Do’s and Don’ts

DO leave your 401(k) or IRA alone. Withdrawing your funds early may feel like your only option when the market gets volatile, but it is usually not a smart move. A withdrawal penalty of 10% could be added if you take it out before the age of 59 1/2 , and that is a huge chunk of your savings if you’ve been contributing to it through the length of your career.

DON’T let your emotions dictate your decisions. When your financial security is in jeopardy it may feel like the end of the world, but the market is always changing. When one day is looking bleak you have to trust that there will always be an upward curve. Let the market recover and don’t let panic or emotions rush you into a poor decision.

DON’T let the news consume you. The news narrative is often one of negativity and panic and spending too much time being glued to every person’s words is not productive. Remember that coverage is often framed as the worst-case scenario, and your time will be better spent speaking with your financial professionals.

DO have up-to-date information from a professional and make a plan!

Lucky for you, we can help you with that plan! Click HERE to sign up for a time to meet with us to discuss what to know about investing in retirement. We can create a plan that best fits your lifestyle goals and accommodates your risk tolerance. At Moore’s Wealth Management we listen to your concerns and plan accordingly!