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Keeping a Level Head in Finance and Investing

If the stock market has taught us anything the past few years, it’s that the unexpected will inevitably come to fruition. With dramatic highs and lows throughout COVID, and sweeping changes to the tech industry and beyond in 2023, investors likely feel stressed out and overwhelmed when it comes to keeping tabs on the market. 

Our advice? 

It’s okay to stay informed of market changes, but it’s important to keep a level head. Today we wanted to talk about what to do when the markets are up – and down – to help yourself stay sane and keep the big picture in mind. 

When the Markets Are Up

When markets are up, it’s easy to feel a sense of peace – and it’s even possible to feel a little bit desperate to “take advantage” of markets that are doing well. There’s nothing wrong with wanting to maximize your investments, and to pursue the best returns you can in your portfolio. 

You’ve worked hard for your money. As you continue to grow your nest egg, when the markets are up, you might feel pressured to: 

  • Reevaluate your portfolio
  • Make sweeping changes to your investments to “chase” returns
  • Buy, buy, buy – even if prices are high

Here’s the thing – if you aren’t investing in alignment with your goals, values, retirement horizon, and risk tolerance, you’re putting yourself in a sticky situation. Buying high when the markets are doing well can be a recipe for trouble down the line. 

That’s not to say that you shouldn’t continue investing when the markets are up. Instead, focus on consistency and your unique long-term game plan. Remember: greed in investing won’t get you very far! Refocusing on what you want out of your investment journey can help you from “what-if”-ing yourself to death when markets boom. 

When The Markets Are Down

 If you think that keeping a level head when markets are up is challenging, wait until markets start to experience turbulence! As markets start to dip, investors may find themselves feeling  some amount of anxiety. There’s a temptation to: 

  • Sell off poorly performing stocks to avoid “losing” more of your accumulated wealth
  • Go to cash because it feels like a “sure thing”
  • Check the markets and your portfolio values daily (or even more frequently) to stay “in the know”

The truth is that none of these strategies will help you move through a down market successfully. In fact, many advisors recommend increasing your investments during a down market because, technically, the market is “on sale.” Over time, the investments you made when stocks were at a low(er) than average value could grow and help catapult you toward your long-term goals. 

If you’re struggling to stay calm during market turbulence, it may be worth asking: 

Am I making this decision based on facts or fear?

If all of your decisions are coming from a place of fear, you can:

  • Check in with your advisor if you need a sounding board
  • Limit your access to news about the markets
  • Focus on what you can control – staying consistent and creating safety in your day to day (like ensuring you have enough cash on hand to weather a storm)

In Short 

What should remain important to you as an investor is your unique goals – and how you’re progressing toward them. Focus on what you can control, like the consistency of your investments, how much you’re saving, and whether your portfolio aligns with your overall risk tolerance over time. 

If you have questions, or want to connect, reach out to us today by clicking here.

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