The Market Went Down. What Should I Do Now?





August 27, 2015


JRW_WW.jpgWhen stock markets drop like they have in recent days, it’s natural to feel some concern. But it’s not natural, or maybe I should say not optimal, to be filled with anxiety, wondering: ‘What should I do?’


As our client, you should relax, because when we set up your portfolio, we designed it to handle times like these. That’s why it reflects your personal tolerance for risk. That’s why it’s diversified, with stocks balanced by bonds (as the S&P 500 lost 10.3% in value over just five days, the SPDR Barclay’s Aggregate Bond Fund gained .5%). That’s why, as you move closer to retirement, your portfolio should have an increasing allocation to bonds.


And for those of you not near retirement, short-term volatility should be more tolerable because time is on your side. In 1998 it was the Russian Financial Crisis. In 1973 it was the Arab oil embargo. Five years from now it will be something else. The point is that through all of these choppy waters the stock market charts a long-term upward path along with human economic progress, something that’s proven pretty hard to stop.


Of all the media coverage of the recent market decline, I find that of Jason Zweig’s the best. There is a reason he is such a widely-respected financial journalist. His top piece 5 Things Investors Shouldn't Do Now of advice to investors: Don’t overdose on the bad news. It magnifies short-term trouble in your mind while crowding out your long-term strategy. That’s a recipe for poor investing.


One way I measure the state of mind of our clients is by how much our phones ring during events like those of the past few days. I’m happy to say it’s not been much more than usual. But if you do find yourself worried about your financial situation, please call. It is important to us that you feel confident and in control of your finances at all times, just as it is important that your finances are optimally  allocated to fulfill your goals in life. Please contact your PERSONALCFO or Jim Waters, CFP®, at 713.964.4028 or