Investing Wisely
Common reactions to market downturn:
- Declining balances
- Fear
- Uncertainty
- Cashing Out
It takes wisdom to withstand the ups and downs of the financial markets. While it is tempting to let our emotions guide our actions, experts recommend that we continually review our objectives and make decisions based on the long term picture. An annual review of your financial goals by a trusted financial advisor should help you adjust your portfolio to fit your needs in these three areas:
- Priorities – are you saving for retirement, buying a home, planning a vacation, or simply concerned about your cash flow? Each of these requires a different strategy.
- Time horizon – are you targeting a date far into the future, or a short term goal? The closer you are to needing access to your invested funds, the less risk you will likely want to take.
- Risk tolerance – everyone has an investing “comfort level.” No one should talk you into an aggressive investment strategy if you are a more conservative investor. Likewise, if growth is your primary objective, you may be willing to take a higher degree of risk.
