by Daren Givoque, CDFA , Financial Advisor & Partner, O’Farrell Financial Services
These are uncertain times. The stock market has reflected that fact. It is natural that in times like these people start to worry about the state of their future.
However, could there be a silver lining?
In good times, people tend to run on autopilot. Our days become routine and we often approach the weekend disbelieving how quickly the work week has passed. When your days follow a recognizable pattern, it is easy to go on autopilot. The Covid-19 pandemic has forced the entire world out of our routine.
It is a great time to re-evaluate and look at your financial goals. Here are three things you can do right now to help you feel more in control and refocus your energy into something that will benefit you in the long-term.
1. Review your investments:
With your advisor, look at your investment portfolio. This is a great time to replace investments that have not performed well with more defensive investments that will perform regardless of market conditions. Switch out all the investments in your portfolio that are not serving you and add in options that are more likely to perform well down the road.
2. Re-evaluate your risk tolerance:
This is a great time to re-evaluate how you really feel about the ups and downs of the market. Often when people first set up an investment portfolio with a financial advisor, they tend to be relatively aggressive. However, when the market starts to go down, and investments decrease the volatility feels uncomfortable.
It is a good chance to re-evaluate how comfortable you really are with risk and re-balance your portfolio accordingly.
3. Create a detailed plan:
This is the time to create a detailed financial strategy that reflects the goals you want to achieve. Goal-based plans are useful because they take into consideration what you want to accomplish over a certain time period. This will directly affect your investment strategy as a longer time frame allows for a greater level of risk.
Do not give into fear. Historically, as the world has gone through major challenges, the market has always recovered. The best thing you can do right now is stop, take a deep breath, and have a good conversation with your financial advisor. If you have more questions, please reach out to us! See our ad in this week’s North Grenville Times for contact information.