The word “volatility” seems to be thrown around quite a bit these days. Often used in a way that references a downward trend in the market, volatility is a bit more complex than that. Volatility refers to swings in the market, yes, but both up and down and large in size over a brief period of time.
Are Headlines Controlling Your Strategy?
When the markets go through long periods of steady climbing, you can begin to feel a false sense of security in your investments. If riskier investments become an oversized portion of your portfolio during a long upward trend in the market, a downward trend could drastically alter your account values.
When markets are jumping up and down from one week to the next and eye-catching headlines are running both your emotions and investment strategy, this can become a recipe for disaster complete with unnecessarily incurred selling and purchasing fees and a dwindling portfolio from constantly being rebalanced.
A Plan is Peace of Mind
Letting headlines and emotions control your market strategy is not a plan that can provide consistency and peace of mind leading into your crucial retirement years.
In order to begin putting together a real retirement plan and strategy, take some time to assess your position by asking yourself these questions:
- Where are your savings at now?
- Where would you like your savings to be when you reach retirement if you haven’t already?
Costs of Living, Income Needed
- What does your household spend on its general cost of living?
- How much do you anticipate these costs changing in the future?
- How much income will you need to comfortably cover the cost of living for your household? Now and in the future?
Your Risk Tolerance
- How much of your savings will need to provide a stable income that covers your annual costs of living?
- How much of your savings are you willing to invest in higher-risk, potentially higher-reward investment strategies?
- If you aren’t yet retired, how much more do you need to save in order to meet your retirement income goals?
Answering questions like these and putting a firm investment plan in place for your retirement can allow you to separate yourself from the daily market swings and have peace of mind that your investments have been made in the best possible way for you and your household. We’ve barely scratched the surface of an all-encompassing retirement plan here, as many other factors contribute to the health and safety of your retirement (healthcare costs, taxes, asset liquidity, etc.), but thinking through these first questions and reaching out to a trusted financial advisor is a great place to begin.
To schedule a complimentary financial review with Moore’s Wealth Management, click here or call our office at 770-535-5000, where a staff-member is awaiting your call Monday through Friday, 9AM to 5PM.
This material is provided as a courtesy and for educational purposes only. Please consult your investment professional, legal or tax advisor for specific information pertaining to your situation.