The
investment markets had a rocky start in 2016, and many analysts believe market volatility
may continue to be a theme throughout the year.
Market
volatility is a tough factor to deal with. It inherently makes us want to
react, to change, to make things smooth and even keel. It may cause stress when
you know that your investments can be impacted by elements completely out of
your hands.
But
there is something you can control in that regard. It’s your financial
objectives -- your short- and long-term goals. If you’ve put strategies in
place to help reach those goals, we believe volatility shouldn’t necessitate
changes in most situations.
We
always talk about “staying the course” but recognize that it’s easier said than
done. If your situation changes, if your financial goals change or if you just
need reassurance that your financial plan
is on track for your retirement income goals, feel free to reach out -- that’s
what we’re here for. And periodically, we’ll reach out to you to help reassess
your plan and ensure it’s still on track.
[CLICK HERE to read the article, “Poll:
What the Market Volatility Is Telling Investors,” from Morningstar, Feb. 21,
2016.]
The
Greek philosopher, Heraclitus of Ephesus, is quoted as the first to state, “Change
is the only constant in life.” The same is true with investment markets. Today,
there are plenty of people with their own philosophies on how to manage the
constancy of change in the investment industry.
Jack
Bogle, founder of the Vanguard Group, reiterates his mantra that investors
should “stay the course” in this volatile market. He offers a rule-of-thumb
strategy for volatility: 60 percent to 40 percent stock-to-bond ratio. In his
words, “If you’re younger, a lot higher, if you’re older ... somewhat lower.”
We
believe this may be good advice in general, but it doesn’t take into account personal
factors such as investment timeline and tolerance for risk. For that, you
should consider working with a financial
advisor to discuss your financial situation, risk tolerance and investment
objectives. We will work with you to identify strategies utilizing both
investment and insurance products that may help you address your concerns.
[CLICK HERE to read the article/view the
video, “Don’t panic about market volatility: Jack Bogle,” from CNBC, Feb. 17,
2016.]
[CLICK HERE to read the article, “Mitigating
the financial and emotional impact of market volatility,” from Columbia
Threadneedle, Feb. 8, 2016.]
[CLICK HERE to read the article, “Personal
Investment Strategies for Volatile Times,” from Knowledge@Wharton, Feb. 16,
2016.]
Market
volatility frequently drives investors into more “safe-haven” financial
products, such as CDs and cash. However, your safe haven today won’t
necessarily be a safe haven when you retire. Small returns and low yields that
do not keep up with the cost of living can put your retirement income in a challenging
position.
The
reality is that we as individuals can’t control the markets. When large numbers
of investors all commit the same actions -- such as invest in a certain company
and drive up its price, or sell and drop it precipitously -- we can influence
the price of individual stocks. But there are far greater and overarching
economic forces that impact market performance, such as oil production and the
direction of interest rates.
All
we can really do is control our own actions -- and, as Bogle suggests, take our
emotions out of the picture and rely on a retirement strategy designed to meet
our personal goals. That’s exactly what we’re here to help you do.
[CLICK HERE to read the article, “Investment
Insights: No Relief,” from Merrill Lynch, Jan. 9, 2016.]
[CLICK HERE to read the article, “Vanguard
CEO: Expect a lot less from stocks for a decade,” from CNBC, Jan. 25, 2016.]
Investing
involves risk, including the potential loss of principal. No investment
strategy can guarantee a profit or protect against loss in periods of declining
values. Any references to steady and reliable income streams refer only to
fixed insurance products. They do not refer in any way to securities or
investment advisory products.
We are an independent firm
helping individuals create retirement strategies using a variety of insurance and
investment products to custom suit their needs and objectives. Investment Advisory Services offered through
Global Financial Private Capital, LLC, an SEC Registered Investment Advisor.
The information contained in this material is provided by third parties and has been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions.
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