Are Investors Allowing the News to Impact their Financial Performance?
It’s no secret that the news is powerful. Over the last few years oil prices, tariffs, COVID, and most recently the election have overpowered the headlines and we’ve seen both positive and negative effects on the economy as a result.
When COVID first appeared and investors got worried, we had conversations around previous epidemics that effected the economy. SARS, MERS and the Swine Flu had impacts on the market, but it recovered, and the same would hold true with Coronavirus.
Financial plans are structured with volatility built in and the long-term in mind. By focusing too much on the headlines, and making changes with each new piece of information, it may imply that investors are paying too much attention to short-term noise.
If this is you, ask yourself why the news is having such an impact. If you’ve taken on too much risk and can’t withstand the downturns, let’s revisit your portfolio and find opportunities to reduce risk.
If you have a big purchase coming up and you’re worried about being forced to sell equities during a downturn, we should review how much cash you have available.
If you’re regularly drawing from your portfolio because you’re in retirement we can evaluate your bond positioning to confirm we have enough to withdraw from, should your stock holdings need time to rebound.
Being an informed investor is important, but allowing each piece of news to control your investment holdings can lead to underperformance. Working with a trusted wealth advisor should give you confidence that regardless of what happens in the headlines, your portfolio is structured to weather the storm.
After all, investors who sold securities during March of 2020 locked in double digit losses, while those who stayed the course ended the year with positive returns.*
*Source: MarketWatch – S&P 500
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.