Market Volatility

Whenever the markets decline or enter correction territory, the most common question we get asked as financial advisors is "Should I be selling my market-based accounts?"

Joshua P. Mersberger, CFP®, CRPC

Nov. 14th, 2018


As you have probably noticed on the news lately, markets have been extremely volatile over the last month. Markets have been reacting to tariffs/trade wars, increasing interest rates, and the general uncertainty regarding future economic prospects. Whenever markets decline or enter correction territory, the most common question we get asked as financial advisors is “Should I be selling my market-based accounts”? As your financial advisor and fiduciary, our most common response is to stay the course and ignore the news headlines.

Asset Allocation & Risk

The most important thing to do when markets are volatile is to revisit your existing asset allocation and ensure that you are comfortable with the amount of risk that you are taking. One of the first things that our financial advisors do when we meet with existing clients and new prospects is to discuss risk. Many clients do not want or do not need to take as much risk as the market and we work with them to design an asset allocation that reflects their individual risk tolerance. It is important to understand that depending on your asset allocation, you may be seeing a much different return than the volatility you are seeing on the news.

Customized Financial Plan

The second thing that we remind clients of is that we create a customized financial plan for each and every client that we work with. This financial plan has been designed to succeed over the long term, through good markets and times of market volatility. Whenever we discuss down markets with clients, we always review the financial plan to ensure that clients are still on the track to meet their goals and enjoy a successful retirement. The financial plan is extremely helpful in reinforcing the fact that markets will be volatile over time, but with the right plan in place clients are positioned to succeed over the long term.

Long-Term View

All in all, while it is never easy to watch markets decline and see hard-earned market gains disappear, we encourage clients to take the long-term view and ignore the short-term market fluctuations.

That being said, we understand that clients will also have questions or concerns and you can always reach out to us with any question or concern and we will be here to answer them as best we can. As always, thank you for your trust and confidence in our services.

Please contact our office if you have any questions regarding this topic.

Diversification and asset allocation strategies do not assure profit or protect against loss. Past performance is no guarantee of future results. Investing involves risk. Depending on the types of investments, there may be varying degrees of risk. Investors should be prepared to bear loss, including total loss of principal.

Join Our Mailing List

Subscribe to get updates, and expertise content from our team.