Top 5 Tips for Distancing Ourselves From Market Anxiety
It’s amazing how different our world looks today than just a few weeks ago! Market volatility, state and national emergencies, social distancing and empty grocery shelves are but a few of the new realities we face in our daily lives. Not only are we trying to fight against and protect ourselves from a global pandemic but investors are also faced with a drastic decline in stock values and the fear of economic contraction on the horizon.
Needless to say, tensions are running high!
Amid so much uncertainty, we should all follow the basic recommendations for relieving stress and practicing self-care. Step away from 24-hour news but continue to- exercise, stay connected to friends and family digitally and get outside to enjoy the budding spring.
Here are some tips and recommendations for exercising control and managing risk that will ultimately provide for successful financial outcomes.
#1 – Practice social distancing from your portfolio and the daily news
The most unsettling aspect of market downturns is the fact they are out of our control. During times of such volatility, it is OK to step away from your portfolio and tune out the news. Checking the value of your assets on a daily basis can only cause greater anxiety. Be informed but be sure to keep a healthy perspective.
#2 - Remember that market downturns are natural movements and can be helpful
While uncomfortable, it is important to stay focused on the long-term. Investors cannot manage the day-to-day volatility but they can manage their reactions. Our thoughts impact our emotions and our emotions lead to behaviors. Make sure you are not allowing your emotions, like fear and anxiety, to dictate your actions. Instead, maintain priorities and stay focused on long-term strategies.
#3 - Take this opportunity to reevaluate risk profiles and asset allocation
See if portfolios are in line with those long-term objectives and goals. Investors can use this correction to their advantage and rebalance portfolios to ensure proper diversification. A rebalance puts excess cash to work, reduces concentrated positions and provides opportunity to buy into asset classes that were previously “too expensive.”
#4 – Let history repeat itself
History tells us that markets do, eventually, recover. The U.S. economy is strong and with the right action today, our nation is poised to come back stronger than ever. Making sure that portfolio allocations are in line with goals today will pay off when the inevitable recovery sets in and markets are back moving in the right direction.
#5 – Stay connected with your advisor
Take this time to meet with your financial advisor (maybe over the phone to maintain social distancing) and review your plan for the short and long-term. During times of such volatility, it can seem counterintuitive to review accounts and witness the impact of this drop, at its height, on asset value. But this truly is the time when advisors can make all the difference. Financial advisors are not only helpful in recommending and implementing investment strategies but they can also provide support and insight during times of uncertainty. Investors should use this time as an opportunity to deepen relationships with professional advisors and explore opportunities for long-term success.
Today’s economic uncertainty may cause worries about monthly cash flow and financial stability within the household. Market volatility and, indeed, the world of forced shutdowns we live in today, provide an opportunity for families to review and revise their overall financial health. This is the time to ensure your financial house is in order and prepared to weather this economic storm.
Make sure household budgets are in line with earnings and identify spending priorities. Consider a pivot from spending to saving to help ensure that emergency accounts are in place. Next, start putting more away for retirement and take advantage of good buying opportunities in a market lull. Smart decisions today can pay off handsomely in the future.
So keep in mind, taking positive actions can help you reach successful financial outcomes today and tomorrow and can also provide a much needed sense of peace and control within.
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