Heritage Partner & Financial Planner Regina Beatty penned an article for Lincoln Financial Group on why you should trust the advice of a financial professional. Regina talks about the ever-changing stock market, and how it is instinctual that clients will react impulsively on their emotions. She stresses the importance of looking at the bigger picture instead of reacting on that impulse that may be short term. Regina listed four important financial considerations that clients typically don’t want to hear – but should listen to:
1.)”Time in” the market has historically been better than trying to “time” the market. It’s human nature for clients to not want to hear this. They can see what’s constantly happening in the markets in real-time on TV, online and other platforms. That makes it difficult for them to adhere to their financial plan through large downturns for fear that this might be the time when things don’t recover. Of course, past performance doesn’t guarantee the market will always recover.
2.) There are emotions tied to the money clients have accumulated during years and years of hard work and saving. We find that clients often want to react to negative news, making them question if they should sell when the going gets tough.
3.) Our clients’ portfolios are well-diversified, according to their goals, time horizon and risk tolerance. They are not gaining and losing at the same rates that individual indexes, like the DOW or NASDAQ, are gaining or losing.
4.) In addition, selling during a down period locks in losses that they will need to gain even more to hit the break-even point when they re-enter the market. We invest for our clients with only as much risk as they need to help reach their long-term goals, knowing that the markets will rise and fall constantly.
Regina understands these conversations can be arduous, but it is important to continue and focus on the bigger picture and stick to a financial plan with confidence, even when times are tough.
Click HERE to read the full article.