Recently, when deciding what to write in our quarterly manager’s message, I decided to look back at our spring 2014 letter, which began with a market breakdown of “calm” along with periods of volatility. These statements were followed by thoughts of the Fed tapering economic support, with investors focused more on the real economy, wage reports and interest rate concerns.
Sound familiar? If you listen to or watch current reports on the markets, you will notice we’re hearing the same conversations today. Additionally, the Fed has dropped hints during the last several meetings that it is preparing for rate increases either this summer or early fall. Is it for real this time? It can be difficult to decipher what will happen by listening to the media.
At this moment, you might be asking yourself what does this news mean for my portfolio? How can I prepare? The most important thing to do is not overreact. I recently read an article that the biggest risk to investment portfolios is often the investor, and I have to agree. Actions stemming from anxiety of market volatility or downturns can often have more of an impact on your long-term returns than the conditions of the market.
Through my experience with the ups and downs of the market, my strong belief in long-term investing and that you have to get through the downturns to continue to move ahead has remained. However, in order to stay the course, one must have a plan in place, and commit to not overreacting to every market change.
As April was National Financial Literacy Month, it served as a firm reminder for all of us to take a look at our current financial plan, revisit it for any needed changes and recommit to our goals. As always, Legacy is committed to monitoring and adjusting our portfolios in order to take advantage of any market conditions. Our goal is take away your financial anxiety, so you can spend your time enjoying your life.
Should you have any questions, concerns or a desire to take a look at your financial plan, we invite you to reach out to us. I’ve also included a link below to an article that gives further advice on how to stay sane in a crazy market.