There’s an old saying, “May you live in interesting times.” And we certainly have.
Sometimes “interesting” means inspiring and wonderful, but other times, it can be downright scary. Even scarier is when those interesting times result in a wild market. Unexpected events can lead to uncertainty, and uncertainty can negatively impact stock prices. But no one has a crystal ball, and uncertainty is just a part of a rich, multi-faceted life. Also, knowledge is power, and we’re committed to equipping you as best we can with the tools and information you need to weather this storm.
Understanding what volatility means in the financial markets is crucial to withstanding times of market movements. While the specific causes are countless, and at times extreme, the root of nearly all volatility is uncertainty. While market fluctuation is an unavoidable part of investing, there are strategies we employ to help avoid long-term negative impact on your portfolio.
A key part of sustaining your portfolio through any market situation is having a clear understanding of your risk tolerance for market fluctuations. Appropriate asset allocation and diversification can diversify your portfolio and deliver a broader safety net during phases of financial adjustment. Also, keep in mind, market variability doesn’t automatically equal bad news, it can equal opportunity. Though it may be natural to focus on declines caused by instability, it’s important to remember that market fluidity can also offer opportunity to invest for future growth.
Enduring ambiguity and economic changes without reacting emotionally can be challenging, particularly the kind we are currently experiencing. Market cycles are normal and expected. Markets have proven resilient over time and it’s important to maintain discipline and focus on your long-term goals. If you'd like to discuss your situation with a GBB Advisor, please reach out to us. Let’s connect at (916) 924-7527 or complete our contact form.