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

Carson Investment Research’s Outlook ’23: The Edge of Normal

At long last, The Carson Investment Research team is proud to officially release our 2023 Market and Economic Outlook, aptly titled Outlook ’23: The Edge of Normal. You can download the whitepaper here. As you are all painfully aware, 2022 wasn’t pretty for investors – it was the first year …

What Documents You Should Provide to Your Tax Preparer

Mike Valenti, CPA, CFP®, Director of Tax Planning Tom Fridrich, JD, CLU, ChFC®, Senior Wealth Planner It’s January, so it’s officially tax season! One of the most common client questions heard by tax preparers is, “So, what do you need from me?” The short answer to that question is often, “ …

The Designer’s Creative Studio with Theron Skees, Episode #117

Theron Skees is a highly adaptive, solution-oriented creative executive with 30 years of experience assembling and leading multi-disciplined teams for both domestic and international projects in the Themed Entertainment Industry. Theron is a veteran of Walt Disney Imagineering and he has le …

New Year Tax Time Prep

Now that 2022 is in the rearview mirror it is time to start getting your things organized to have your taxes completed.  Being organized throughout the year could make this an easier task to accomplish, but if you have not prepared in advance it can be done.  You may want to also use what y …

1 2 3 132 133 134
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

TweetsFollow Us