5 Tips on How to be Versatile in a Volatile Market

February 11, 2022

The volatility of our market as of late, especially in the last few months, brings signs of change. By nature, the market goes up and down, swinging from bull to bear, with small bumps and blips along the way. The volatility we’re seeing results from a number of sources. A few of the top reasons are: 1) Federal Reserve actions, such as raising interest rates and tightening money supplies 2) Supply chain issues 3) COVID-19 fears.

What does all this mean for you as a retiree? In our experience, market volatility can have an impact on how retirees sustain themselves. Retirement is a cash-flow stage of life, during which sustainability is critical. The key to a healthy and happy retirement is the ability to sustain your chosen standard of living, to afford the lifestyle you desire no matter what the market is doing. You need an investment approach that preserves and protects in any market. The important thing is to be aware of where we are in the cycle and adjust savings and/or investment strategies accordingly to sustain your desired lifestyle. If we’re in the midst of volatility and moving toward a bear market, what can you do to sustain? Here are six tips to maintain success, in this or any market.

Adjust Your Strategy to Your Stage of Life

For retirees, we talk about two main stages, pre-retirement and post-retirement. In pre-retirement, you are in the Accumulation Stage — saving and growing through your income and investment strategies. In post-retirement, you are in the Distribution Stage — the time where cash flow from your investments becomes the “income” you live on. While there is some overlap in these stages, your investment strategy in each should be different. Don’t make the mistake of maintaining the same approach as you move from pre- to post-retirement. Speak with your financial advisor about changes you can make to sustain yourself through any market cycle.

Avoid Knee-Jerk Reactions to the Market

It’s tempting, when you see stocks drop and the market take a downturn, to question your strategy. However, quick moves in these cases can often be wrong moves. When you work with us, we base our strategies on long-range results that stretch across various market ups and downs, so you can rest assured we’ve already thought this through. A good investment strategy will outlast market fluctuations.

Turn Off the TV

Okay, you don’t have to actually turn it off, but maybe just change the channel. Keep in mind that news networks are in the business of news — and market changes are big news that everyone wants to hear about it. When you listen to the pundits, you’ll hear a thousand voices and opinions that never reach consensus. We find consensus, by watching what’s actually happening in the market and building successful strategies that survive any market.

Step Back and Look at the Big Picture

I’m not the first to say it, but I’ll say it again, “Time in the market is what matters, not timing it.” Trying to play the market with a short-term, reactionary approach is financially dangerous. Most people make mistakes, either going in or coming out. Either way, trying to time it is impossible. We recommend a big picture approach, one that navigates and sails through various markets. When you zoom in and look at the market up close, you’re going to see drastic ups and down. When you pull back and look at it over a longer range, it’s always had predictably steady growth. Choosing a strategy focused on the long term brings peace of mind — and better results.

Choose a Firm That Communicates Often

We are often asked if our clients are calling us constantly and frantically when the market turns volatile and we can honestly say they don’t. We don’t get calls from worried clients very often, because we stay in contact proactively. We have regularly scheduled calls and check-ins with our clients, to talk about what we’re seeing in the market and how it is or isn’t impacting their strategy. We recommend working with an advisor who’s that committed to and invested in your life as well

At Bridgelight Financial Advisors we make it one of our top priorities to ensure our clients are prepared for and protected from our ever-changing market. If you are in need of a financial advisor that specializes in helping you make your retirement a successful one, our team at Bridgelight Financial Advisors would love to help you experience confidence in every aspect of your financial plan. Call (203) 795-7080, email Advice@BridgelightAdvisors.com, or schedule an appointment online to meet and get started.

About Bill

Bill Leavitt is the president of Bridgelight Financial Advisors, an independent, privately owned fiduciary financial advisory and financial planning firm. He specializes in working with pre-retirees, retirees, professionals, and women investors, helping them navigate a complicated and ever-changing investment landscape. With over 25 years of experience, Bill serves his clients using his own unique financial planning model, The Wealth Focus™ Process, where he helps clients develop their customized long-term wealth strategy in four comprehensive steps. A Connecticut native, Bill resides in southern Connecticut with his wife, Laura, and their three daughters. To learn more about Bill, connect with him on LinkedIn.

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