5 Topics to Discuss With Your Financial Adviser During Market Volatility
Talking to a professional can help keep you grounded in times of market volatility.
This stinks. There I said it. Feel better? Probably not.
You are probably glued to the tube thinking, “Why didn’t I see this coming?” while listening to the “experts” who say, “I saw it coming and said so seven weeks ago.” It’s probably the same guy that predicted the 10 percent market drop in March 2009, when the market bottomed out after the 2008 meltdown.
So if you’re having a hard time with the recent market correction, I have some advice for you: Talk to your adviser. Here are five things you should cover:
Discuss the difficult, complicated, and unpredictable equity market.
There are no easy answers, and if anyone had all the answers, they’d keep their mouths shut and make money quietly. Anyone who claims to have the answers or a quick-fix solution probably has something to sell.
Discuss your individual situation.
How has the latest market action affected your financial plan, both in the short term and the long term?
The television has conditioned us to pay attention to the “distraction of the moment.” TV stations sell advertising. To sell air time for commercials, they need viewers—the more the better. The old saying “If it bleeds it leads” applies to the financial news market as well. They have to create the distraction of the day, every day.
If you have a good solid financial plan, tune out.
Review the actual probability of achieving the goals in your Private Wealth Design.
Having a cash-flow based financial plan is so important—not the so-called “goals-based analysis” popularized by some large Wall Street financial institutions. You need to be able to measure the probability of success of your plan given inflows and outflows of cash over a period of time, which can only be determined by a true financial plan. If you are unable to have a discussion about this, get a new adviser.
Discuss your investing personality (and your adviser’s).
Is either of you buying, selling, holding, or even all of these at once? Is it the right thing to do or the wrong thing to do? That’s the real question, right? The answer: yes, no, and maybe.
It depends on your personal situation and your financial plan. Unless your short-term cash flow situation has changed, you probably don’t need to do anything. Don’t ditch your plan over an emotional reaction—that’s one reason why you have a plan in the first place.
Determine what asset management costs you.
There is more than the explicit costs you pay for asset management. Taxes can take a big bite out of your returns, too. If you or your adviser are trading in this market, especially over the short term, you may be giving away 15 to 40 percent of your returns to the government in the form or short- or long-term capital gains tax.
Read the article on U.S. News & World Report here! >
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for individual investors. To determine which investment is appropriate, consult your financial advisor prior to investing. All performance references are historical and do not guarantee future results. Asset allocation does not ensure a profit or protect against a loss.
IMPORTANT DISCLOSURE INFORMATION
Please remember that past performance is no guarantee of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Monument Capital Management, LLC [“Monument”]), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Monument. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. No amount of prior experience or success should be construed that a certain level of results or satisfaction will be achieved if Monument is engaged, or continues to be engaged, to provide investment advisory services. Monument is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice.
A copy of Monument’s current written disclosure Brochure discussing our advisory services and fees is available for review upon request or at www.monumentwealthmanagement.com/disclosures. Please Note: Monument does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to Monument’s website or blog or incorporated herein, and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.
Historical performance results for investment indices, benchmarks, and/or categories have been provided for general informational/comparison purposes only, and generally do not reflect the deduction of transaction and/or custodial charges, the deduction of an investment management fee, nor the impact of taxes, the incurrence of which would have the effect of decreasing historical performance results. It should not be assumed that your Monument account holdings correspond directly to any comparative indices or categories. Please Also Note: (1) performance results do not reflect the impact of taxes; (2) comparative benchmarks/indices may be more or less volatile than your Monument accounts; and, (3) a description of each comparative benchmark/index is available upon request.
Please Remember: If you are a Monument client, please contact Monument, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. Unless, and until, you notify us, in writing, to the contrary, we shall continue to provide services as we do currently. Please Also Remember to advise us if you have not been receiving account statements (at least quarterly) from the account custodian.