market volatility, financial planning, [PARTNER FIRM] Management, Omaha, Nebraska

Volatility – What to Expect and How to Act

Share Post: facebook Created with Sketch. twitter Created with Sketch. linkedin Created with Sketch. mail Created with Sketch. print Created with Sketch.

We always try to explain risk tolerance and investing in an easily understandable way. For most people, investing in their 401(k) has been their only experience investing, so their knowledge of investing as a whole is limited.

An emoji guide to investing may not be the first thing you think of, but it relays a message any investor can relate to. The non-emotional investor – the steady emoji below – who sticks to a plan and knows their risk tolerance has the highest probability for long term success.

guide to investing

Source

Keeping the image above in mind, how can you prepare yourself for volatility? Human beings have short memories, especially when it comes to investing. When everything is going great in the low market volatility investors seem to forget and tend to get more aggressive with their investments. The reverse is true as well: when everything is going badly in the market coupled with high market volatility, investors suddenly become more conservative.

A successful active investor should do the exact opposite. Let’s take a look at what history shows us. The chart below shows the number of +/- 1 percent or greater one day moves in the market per year (dark blue being up days and light blue being down days):

chart by scott kubie

Chart created by Scott Kubie, Senior Investment Strategist at Carson Wealth

When you look at the chart the first thing you may notice is the average number of +/- 1 percent or greater one day moves in the market: 68. It seems like a lot, especially since the past seven out of eight years have not reached the average.

2017 was the lowest in history and provided 20 percent plus return for the market, while 2008 had the most in history when the markets saw a near 40 percent decline.

Our advice to investors is to realize times of high market volatility nearly always follow times of low volatility. Accept that there is going to be market volatility, and it will come in different forms each and every year. Know your risk tolerance and stick to your plan, and you can survive the rollercoaster of emojis!

Take our risk tolerance questionnaire and speak to an advisor to confirm you are on track.

Make an appointment today!

Share:
facebook Created with Sketch. twitter Created with Sketch. linkedin Created with Sketch. mail Created with Sketch. print Created with Sketch.
Share Post: facebook Created with Sketch. twitter Created with Sketch. linkedin Created with Sketch. mail Created with Sketch. print Created with Sketch.

RECENT POSTS

If It Walks Like a Duck and Talks Like a Duck, It Might Be a Bargain

Published by Rob Furlong A couple weeks ago, Heisman trophy winner Marcus Mariota led his team, the University of Oregon Ducks, to the National Championship game. During his three years as the team’s starting quarterback, he has accumulated impressive stats culminating in a senior year wher …

Qualified vs. Non-Qualified – I Don’t Get It?!

Published by Teresa Milner If you’ve ever engaged in a conversation about retirement and you heard the terminology of qualified vs. non-qualified but you had no clue what that meant – know you’re not alone! The following is a basic explanation of the difference:

Rising Interest Rates & Financial Stocks

Rising interest rates have many implications for the economy and therefore the stock market. Many feel the Fed will begin increasing the Fed Funds Rate – the rate at which banks lend to each other, sometime this year. On a standalone basis, rising rates have the potential to be very benefic …

American and Immigrant Parents: Life Lessons about Money

Growing up in a third world country and moving to the U.S. is a dream for many immigrants. So when my mother received the Visa for my sister and I to come to the U.S., we packed our bags and were ready within the day.
1 2 3 65 66 67 68 69
market volatility, financial planning, [PARTNER FIRM] Management, Omaha, Nebraska

Get in Touch

In just 15 minutes we can get to know your situation, then connect you with an advisor committed to helping you pursue true wealth.

Schedule a Consultation