I’m here to break down one of the most common questions that Financial Advisors hear: “Should I Care What the Market Does Daily?” While I can confidently say that the short answer is “NO!” – there are some factors to consider. So, let’s break it down:
First and foremost, your long-term financial goals should never be dependent on or altered by daily market fluctuations. Good and bad days (or ever months) are part of long-term investing and to be expected in the market. By using time tested approaches, you can still pursue your goals without feeling the need to constantly adjust your portfolio based on what has happened in just one day.
Secondly, if we’ve learned anything from the past it’s that time in the market is generally more important than timing the market. That’s why at Elements Wealth Management we preach the importance of starting investing early – even if it’s small contributions, these can add up tremendously over time. Of course, if you do happen to time the market correctly, it could be very rewarding. But does anyone really know which days to be in and out of the market? Even a Financial Advisor can’t answer that! That’s why long-term investing and “riding the waves” of up and down markets usually leads to better long-term performance.
Lastly, today’s media driven world often makes it challenging to stay focused on the long-term approach. As we know, the news stations are all looking to share information that causes a reaction from consumers, so it’s important to remember not to get caught up in what the sometimes-overreacting news tells us. That’s why having a trusted Financial Advisor who can guide you through these market swings is important. After we make a plan with you, we are here to be the voice of reason as markets fluctuate and we look to provide objective advice and opinions before you make any quick decisions that could harm your long-term strategy.
Overall, it’s so important to keep your long-term goals front-of-mind and remember what the past has taught us. Building a customized and sound financial plan is critical to getting started.