AVID Chat #63: The Market Is Down. Now What?

When we initially sat down to record this episode, we had planned to do a 2021 market overview.

We quickly realized that crunching numbers and showing market ups and downs after they’ve already happened isn’t necessarily the most helpful for investors who are experiencing market fluctuations in real-time.

The truth is that the market has been volatile in the past few weeks, and some investors are worried. In today’s AVID Chat, we want to go over what’s happening in the market right now, why “hot pick” investments (like cryptocurrency) have impacted investor expectations of market performance, and how to navigate volatile markets without damaging your long-term strategy.

Want to dig in, but short on time? Check out our timestamp below to skip to what you want to hear:

2:00 What’s happening in the market right now?

3:33 What are reasonable long term expectations for your investments?

6:00 Navigating market fluctuations

7:50 Hindsight is 20/20 - you just don’t know what’s causing fluctuations when you’re in the middle of it.

9:00 How can we avoid dismay and blowing up our investment portfolio?

12:15 Put rules in place to rebalance and shift your strategy as the market moves

Throughout the global pandemic, markets have experienced their fair share of ups and downs. Additionally, with new investment opportunities cropping up constantly (like cryptocurrency), investors are experiencing much higher rates of return in some cases. While this sort of fluctuation may feel unprecedented, the truth is that global markets have seen this type of roller coaster before.

When we look back at things like the .com boom, it’s easy to point a finger at exactly what caused dramatic market volatility in the past. Right now things feel “new” because it’s impossible to know, when you’re in the moment, what exact factors are contributing to market volatility. This unknown can cause investors to make rapid decisions about their investments that may lead to problems with their long term retirement and savings strategy in the future.

Unless you’re an investor who has experienced a bear market that stretches on for 12+ months, it’s tough to know how you’ll react when faced with sustained market volatility. This is why it’s important to have a plan in place long before you’re in a high-stress moment when the market is down, and you’re considering changing your investment strategy and selling.

Want help navigating your portfolio? Need a sounding board when it comes to managing your investments? We’re here for you. Reach out to us anytime by clicking here: https://avidplanning.com/contact