Wolfe Kobes Journal
Keep Your Focus on Your Financial Goals, Not the Market or the Media
The markets have started 2021 on a positive note with many indicators pointing to another year of potential growth and gains. Although the markets have been in an upward trend (a secular bull market) for the past 10+ years we have seen times of extreme volatility, such as last February and March when the pandemic hit the U.S and the stock market plunged over 30% in one month. (S&P 500 from Feb. 20th to Mar. 20th)
It is during difficult and volatile times such as these that we need to guard against fear dictating our financial decisions. It is important to stay focused on our goals and financial plan rather than what is happening in the markets. When we start focusing on the markets or what the media is saying instead of our investment strategy and financial plan the natural tendency is to buy when we see things going up rapidly (i.e. GameStop’s recent manic short squeeze, Bitcoin or marijuana stocks to name a few) or to sell when the markets are going down to try to protect our gains and then sit in cash. Those decisions can have severe negative impacts on our financial goals.
Research by Dalbar has shown that individuals who do their own investing tend to underperform those who work with a financial professional and develop an investment strategy and then stick to that strategy. Simply put, when left to our own devices fear and greed can drive us to make unwise and untimely financial decisions.
As to how a new administration, the ongoing pandemic and vaccine rollout could impact the markets this year our research partner Strategas regularly puts together videos to address those issues. And you will most likely learn a lot more (and stay a lot calmer) than by just watching the news or the markets.
Several days ago we sent you a Wealth Planning Strategies video entitled “Building Strength, Resilience and Control: Wealth Planning Strategies to consider in 2021.” If you haven’t had a chance to watch it yet we would highly recommend it. The link is below. Let us know if you find the videos helpful.
Baird’s wealth planning strategies for 2021.
"Lost time is never found again." - Benjamin Franklin
Make the most of today and every day,
Kurt, Jean & Molly