Uncertainty and volatility continue in the global financial markets. We believe reasons include:
- Rising interest rates.
- Inflation.
- Supply chain issues.
- Geo-political conflict.
Every well-constructed investment plan though is designed to weather the unknown as we work toward your end financial goals.
When investing, it is most important to remember these keys points:
- The asset allocation employed in your plans will continue to explain most of your returns as long as we stick to your plan.
- Keeping a diversified portfolio is the most powerful tool.
- Understanding that uncertainty never goes away (please see attached piece to this email).
- Markets are made up of up, and down cycles, it has always been this way.
- No one strategy outperforms all the time.
- A down market does not equal a poor financial plan.
- It’s time in the market, not timing the market that matters.
We came across a bit of a fun yet serious analogy over social media this week. It goes something like this as we paraphrase:
If our homes were appraised every few seconds, we would see movements up and down every day. But we wouldn’t panic and sell if appraisals suddenly came in lower. We need to use this same logic with our investments, especially if we have verified and confirmed their real value and quality.
Volatility is normal and necessary quite frankly. Nothing has been lost just because today’s appraisals are lower than yesterday’s. Prudent longer term investor’s always win with a sound strategy, patience and discipline.
Sources include: Scott Edgington / Chad Willardson / Brian Feroldi
