How many times have you heard "Stay the Course" or "Don't Panic?" My industry uses these phrases to attempt to dissuade investors from making any sudden moves when market volatility increases. This is like the pilot that addresses her passengers when they come across some turbulence: "I've turned on the ‘Fasten Seat Belts’ sign. Please stay seated and we should be flying out of this shortly."
But why do we say that? Why do we try to calm our passengers? It is our job to stay calm and instill that calm in our clients. Our largest job is to protect our clients from making emotional mistakes; doing things at the wrong time based on emotions. We understand the turbulence and we know it's a part of flying.
Portfolios should be managed to anticipate volatility.
The stock market that you hear about in the news is almost always a single asset class: US Large Cap Stocks. The Dow Jones Industrials or the S&P 500 Indexes are proxies for the large companies that are based in the United States. Most well-designed and diverse portfolios are comprised of numerous other asset classes, such as bonds and international stocks. And these other types of assets don't always behave the same as US Large Cap Stocks do.
So, the question is, despite any volatility that may or may not happen in the “markets”, how is your particular portfolio performing? Is it doing its job to reduce overall volatility? Is your portfolio management team doing its job in the cockpit to keep the flight running smoothly?
We realize that market declines are unnerving to even the most disciplined investor. It is our job to turn on the seatbelt sign when necessary.
If you need help, we are always here.
Associates of Krietzberg Wealth Management are registered representatives of Lincoln Financial Advisors Corp. Securities and investment advisory services offered through Lincoln Financial Advisors Corp., a broker/dealer and a registered investment advisor. Member SIPC. Insurance offered through Lincoln affiliates and other fine companies and state variations thereof. Krietzberg Wealth Management is not an affiliate of Lincoln Financial Advisors. CRN-2770011-101019