• Robert Dunn, CFP®

End of Quarter Market Volatility

Updated: Oct 27


At the end of a quarter (click here for Quarterly Market content), we typically provide two pieces of content to highlight what has occurred. This will be happening again this quarter as well. In the meantime, you will be receiving your quarterly performance reports and hearing lots of doom and gloom. This can leave many people questioning what they should do with their investments. The short answer, likely little to nothing.


This type of advice can meet resistance from many and I am not surprised. To this day, I still paint myself into a corner with excessive research trying to find answers that will improve client outcomes and returns. The idea of patiently watching as we absorb more conflicting or negative information about the current state of the US and global economies can be agonizing. In the end, the results are typically the same. We cannot time the market. We cannot predict what sector will outperform. We cannot know in advance when asset prices will start to climb again.

What we do know, is that providing a financial plan, investment plan and cash flow plan improves client outcomes. The combination of these elements help smooth out the short-term volatility and improve the likelihood of achieving their goals. By working with clients to address these issues before a market drop, it can provide some comfort during different market cycles.


The financial plan confirms what you can comfortably draw from your portfolio to last your lifetime. The investment plan aligns with the financial plan to achieve the returns necessary to meet the goals of the financial plan. And the cash flow plan helps reduce taxes, but more importantly determine where money will come from during volatile markets. These are the things we can control.


I am attaching a slightly technical article (see below) from one of the investment companies that we believe supports our investment philosophy for prudent investing. The article provides some guidance on why it pays to stick with your investment strategy and avoid trying to time the markets. Many will hear don’t make too many changes or don’t open your statements. I understand the concept, but hopefully this article, our quarterly commentaries and our blogs will provide the WHY.


The next best advice, turn off your tv, radio or podcast that is preying on our instincts.


As always, if you have any questions or would like to discuss your personal situation, please do not hesitate to contact us.

 
Investing Through Tough Times in Four Charts
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ROBERT B. DUNN, CFP® is the President and Managing Partner of Novi Wealth