Sign In  |  Register  |  About Menlo Park  |  Contact Us

Menlo Park, CA
September 01, 2020 1:28pm
7-Day Forecast | Traffic
  • Search Hotels in Menlo Park

  • ROOMS:

Strategies during unpredictable times: How to make your money matter in the long term

(BPT) - When stocks seem to be in constant fluctuation, even experienced investors may worry whether their investment strategy will stand the test of time. Whether you are new to investing or an experienced pro, market volatility can cause anxiety. You may wonder if you've chosen your investments wisely, when you should sell or buy - and how to stay ahead of a market that seems impossible to predict.

'Risks are up, and the uncertainties are up. That's uncomfortable for people,' said Nick Juhle, chief investment officer at Greenleaf Trust, a wealth management firm managing nearly $16 billion in investable assets from six Michigan locations. Juhle recommended seeing the big picture to regain confidence: 'If you look back over the past 100 years, the stock market has generated strong returns over that period of time. But those returns weren't linear. They weren't in the absence of all sorts of risks, events and things happening in the world.'

If you find yourself in a volatile market, what strategies do investment experts recommend? Here are some tips.

1. Define your long-term goals

Whatever life stage you are currently in, experts recommend developing not only short-term financial goals that are realistic to achieve in a relatively short time, but also defining longer-term goals that prepare you for major life events sometimes years away, such as saving for retirement. Having long-term goals helps you to focus on your financial big picture, so you can stay the course no matter the economic circumstances - even providing a legacy that can outlive you.

'Be disciplined and stick with your investment plan through varying market cycles,' advised Brian Schafer, senior wealth management associate at Greenleaf Trust. 'Slow and steady wins the race.'

2. Avoid emotional reactions in the moment

Having long-term goals, paired with a firm strategy to get you there, can help you avoid knee-jerk reactions to sudden market changes that could disrupt your overall investment plans.

'The gut reaction when the market is unpredictable - and I'm not going to say it's the right one - is to sell equities, get out of the market, try to move to the sidelines and get out of the way because it seems like things are bad and perhaps can only get worse,' Juhle said. 'But in general, our recommendation to clients is to stay disciplined, and to keep your money invested.'

Trying to outguess the market by buying or selling according to short-term fluctuations is a strategy that few investors can consistently win.

3. Learn how dollar-cost averaging can benefit your portfolio over time

Unlike trying to time the market just right (which can be daunting if not impossible), dollar cost averaging is an approach that helps investors reduce the impact of the market's ups and downs. This means investing a fixed amount on an ongoing basis, despite the price of securities at a given time, such as allocating a portion of your paycheck to your 401(k) each pay period. This means, while you're buying fewer shares at higher prices, you're also buying more shares at lower prices.

Take advantage of employer-sponsored retirement plans or investment platforms that allow you to automate contributions so that you can maintain consistency, regularly investing the dollars from your paycheck or bank account. While this may be challenging to practice when securities are up, the benefits are developing disciplined saving habits and avoiding the emotional stress of short-term investing.

'Contributing money to your investment account regularly allows for the practice of disciplined saving,' observed Schafer. 'This strategy allows investors to stay invested and to participate in the historical upward trajectory of the market over time.'

However, you should periodically review your portfolio for rebalancing opportunities, and to ensure that it still aligns with your goals.

4. Live within your means - and plan ahead

To make sure your investment goals will work for you over the long haul, it's important not to overextend yourself. Since not every need can be anticipated, experts recommend keeping an emergency reserve of cash, saving for retirement and prioritizing your short- and long-term investment strategy, only selling stocks when absolutely necessary to plan for the following year.

'If you need to cash out stocks to cover expenses for the next year, sell only the investments you need to cover those costs, but keep the rest invested,' Juhle noted. 'For the money you don't need to access soon, you're going to want that money to grow with the market through its ups and downs.'

Decisions to sell should be based only on careful consideration of your needs, long-term goals and potential tax liability.

5. Seek professional advice

Talking to an investment advisor can help you determine long-term goals that reflect what matters most to you - and identify effective strategies to help get you there. In addition, because each individual's financial and tax situations vary, it is recommended that you consult a tax professional to help you most effectively meet your unique goals.

Learn more about how to plan for your family's future and help your wealth stand the test of time at

Data & News supplied by
Stock quotes supplied by Barchart
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.
Copyright © 2010-2020 & California Media Partners, LLC. All rights reserved.