market volatility, financial planning, Abaris Financial Group, Concord, Massachusetts

Are You Prepared for Market Volatility?

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By John Corron, Wealth Advisor –

The longest bull run in market history continues and market volatility has been historically very low for years. All signs point to a stable global economy and continued slow growth. Central banks have financial markets and banking systems flush with liquidity and support if funding stresses arise.

Nothing to worry about, right?

An environment like this begs the question: Are you well-positioned to meet your goals if volatility returns and markets correct? Are you ready to handle market volatility?

It’s the One You Don’t See Coming

Rarely are market participants hurt by known knowns. It is the unexpected disruption in the linkages between financial institutions, corporations and markets that cause fear and panic when negative headlines ripple through the media.

Re-balancing, a core pillar of sound financial planning, is meant to periodically realign your asset allocation with your current risk tolerance and goal-funding plans. A well-balanced planning and investment approach can help keep your wealth strategy on track and handle market volatility.

Revisiting the balance of investments in your portfolio will help you answer some important questions.

  • Is the risk in your portfolio aligned properly with growing and preserving your assets?
  • Can you be confident that your lifestyle will persist as you would like now and into your later years if a major market sell-off occurs?

The Best Time to Prepare

The purpose of this post is not to suggest that major volatility in markets is imminent or necessarily likely. I’m simply suggesting that an update of your financial plan and a review of your asset allocation is much better timed in environments like the present than when fear and panic arrive at your doorstep.

If it has been years since you last revisited the balance of investments in your portfolio, the mix of assets that you own may have drifted meaningfully from your intended target. Whether due to changes in your financial circumstances, moving closer to retirement or market activity, a check on your current risk tolerance and checking that your portfolio is aligned to your goals is always a good idea.

Identifying and Minimizing Risk

As with most major life decisions, being proactive can give confidence and clarity that you know where your vulnerabilities are if you have any. Identifying and minimizing those risks when the coast appears clear is always preferable and generally cheaper than rushing to address them in times of stress.

Having confidence that your assets are aligned with your current risk tolerance can be reassuring and checking that risk is minimized if markets fall can help you sleep better at night. It’s also worth investing time and energy in a game plan to use market corrections as an opportunity to strengthen your long-term financial plan.

The Best Time? Now!

We all hope that prosperity continues, economic gains persist and asset prices remain calm in the years ahead. However, if you have saved well but not reviewed your financial plan lately, there is potentially a lot at stake.

Investors who proactively update their financial plans and assess their portfolio risk during periods of calm will be much better positioned to handle market volatility. Now is the time to reach out to an advisor to begin the conversation. In the end, you may be well-positioned for uncertainties ahead, but you won’t regret double-checking.

Let’s talk!

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market volatility, financial planning, Abaris Financial Group, Concord, Massachusetts

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