Four Tips to Surviving and Thriving in an Uncertain Market

It’s no secret that 2022 was an abysmal market year that caught most people off-guard. Market events happen very quickly, and trying to respond to them tactically should be left up to the investing professionals. ?But let’s face it, even the most astute market analysts didn’t predict both bonds and stocks would be down double digits… and oh, by the way, it was the first time that happened in the history of the data.

While 2023 has proven to be a better year for both asset classes, a recent market pull-back has left some investors wondering “What’s next?” The unfortunate answer is: No one really knows.

It may seem like doom and gloom out there, with the highest interest rates in 40 years and a still- stubbornly hawkish Fed. But uncertain market environments can create incredible opportunities to not only reassess your situation but also test your resilience as an investor. Here are four tips to help you survive and thrive in a volatile market.

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Call Your Financial Advisor:

When the market is going up and to the right, everyone is happy and calm. We had an incredible decade following the Great Recession in 2008-2009, and it’s natural for people to forget that recessions and bad market environments are actually part of a healthy market cycle. Your Financial Advisor should be to calm the waters for you a bit. A good advisor understands the markets and has lived through enough market environments to help talk you through the uncomfortable feeling of seeing your asset level go down. They have money in the markets too, and their number one goal during these times should be remaining available to take the emotion out of it for you.

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Revisit Your Goals:

This should be done on an annual basis, regardless, but having unstable markets can force you to revisit your goals. Are you saving enough to meet your needs in retirement? If you’re in retirement, is your spending in line to keep you successfully retired? If you retire and a recession happens right after that life-changing event, what are you doing with your portfolio to buffer this worst-case scenario? These are all things your advisor should revisit with you on an annual basis.

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Don’t Look at Your Investments Every Day:

In an era where the media is pumping out so much news on a daily basis (most of which tends to be bad news… that’s just the nature of today’s news cycle), it can be very tempting to obsessively check your investment balances. While it’s important to keep track of how much you’re saving and how your assets are faring, checking your investments daily can create anxiety and worry. Sometimes there’s reason to be worried (e.g., if you’re spending too much or saving too little) but depressed asset prices are temporary, as history has shown on a number of occasions.

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Don’t Forget You’re Playing the Long Game:

It’s important to remember lower asset prices are an incredible opportunity for investors. By and large, investors are more comfortable buying stocks when the market is at all-time highs instead of when stock prices have dipped and are more reasonably priced, but this is counterintuitive. It’s scary when the market is in a tailspin, but this is actually the best time to buy stocks. If you’re in it for the long haul (and if you’re a stock investor, you should be), buying the market at depressed prices will pay you back in (literal) dividends. If history has taught us anything it’s that no matter what dark clouds are swirling, staying invested is absolutely integral to a successful investing life. Nobody knows when things can go south… or north. Understanding the long game is maybe the most important lesson to learn.

This won’t be our last uncertain market cycle – and we’re not sure if or when we’ll have a market bottom. It’s not “timing” the market; it’s “time in the market.” Let us help you navigate uncertain waters so you can survive and thrive in volatile times.

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?Past performance is not indicative of future results and diversification does not ensure a profit or protect against loss. All investments carry some level of risk, including loss of principal. An investment cannot be made directly in an index. Robert W. Baird & Co. Incorporated

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