Front Range Financial Consulting

Disciplined, learned behavior tends to benefit everyone, especially in tense situations. In investing climates characterized by volatile markets, you can benefit by calling on those learned skills and applying them to your investment outlook. That said, when markets drop dramatically, it’s perfectly natural to speculate on how much value your portfolio might lose, or wonder whether you’ll be able to maintain your retirement lifestyle. 

Just as no one can predict the markets, no one can tell you precisely what your portfolio will look like in a year or two. However, we construct portfolios that we believe will weather the storms of volatility that are sure to occur. So, with history as a guide, we encourage you to maintain the kind of discipline that has proved useful in the past. Rather than allowing panic and uncertainty to dictate possibly disastrous investment moves, now is the time to apply the general investing principles and processes that have become ingrained over the years. In doing so, you may find opportunities.

Take a long-term view of the market, make sure you are properly diversified, and check that both the style and class of the investments in your portfolio are in line with your goals and risk tolerance level. As you do, consider new investment opportunities that almost invariably arise in volatile conditions. It may be the right time to review your financial goals, update your financial plan to reflect any significant changes and act on any emerging opportunities.

As you can see, we don’t advocate simply sitting by and “doing nothing” in markets like this. You certainly don’t want to be surprised by developing market trends, but you needn’t let them cause sleepless nights, either. Taking some action – or even taking none after some considered decision-making – is a positive step in itself.

 Volatile markets can be nerve-wracking. But you’ll be best served by reviewing your goals and your plans and, if found to be sound, sticking to them.