This week I’m very excited to bring back Lindsay Corneille, Certified Financial Planner™ for a guest post. Truth be told, I approached Lindsay because I was experiencing a little bit of panic about the erratic activity of the stock market. (I believe I said “Can you please write a ‘don’t panic’ post?”)
The Mathematician and I have big plans to lounge on white sand beaches in our retirement. These last few months have been wreaking havoc on my ability to daydream about the Caribbean.
Lindsay is a wonderful resource for all your financial planning questions, including retirement planning. Lindsay is approachable, whip smart and funny, and she really helps her clients strategize around their personal goals and risk tolerance.
As always, I’m filling in my two cents in pink . . . and the GIFs are all mine. Lindsay is way too professional to have picked these out. Okay, here we go!
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A Traffic Jam: Sitting, idling in your car, watching your GPS arrival time tick later and later leads you to question whether there was a better route to get there faster. The nervous feeling that you might never arrive starts to creep into the back of your mind. . . You get the picture. (Dabs: I usually forgo the nervous feeling and jump straight to rage.)
Traffic is a helpful illustration of where we are sitting with the current stock market. For almost 13 years, we have experienced clear driving, and only had to hit the brakes once. Even then, we didn’t enter a dreaded construction zone (bear market); rather we had a few obstructions, and then we were back to highway speed.
Traffic is exhausting, yet it is a risk associated with travel. You don’t stay home from a great trip because you might hit traffic. Market pull backs are similar.
According to Hartford Funds, dating back to 1945, a 20% market correction happens every 5.4 years*. The stock market was overdue for a correction – all good things come to an end.
Currently, we are in the midst of an unsettling pull back. Yes, it is nerve wrecking, frustrating, and maybe even a shock to the system for those of us who haven’t seen this type of pullback in our investing lifetime.
The key here is not to panic. This market correction is like construction on I-275; it was going to happen
eventually, and it was always going to be rough. But eventually, the construction will be complete. (Dabs: Not at the rate the construction workers seem to be going.)
So, what do you do about it? Something? Nothing? Make blood sacrifices to Plutus, the Greek god of wealth? If you are in your working years, you still want to retire at some point. If you are retired, you still need money in your funds to support yourself, right?
For the long-term investors out there (those who are years away from accessing the money in their investment accounts), review your allocation and if it aligns with your timeline, just maintain your allocation. If the goal is Chicago (retirement, college, inheritance) you don’t change the destination and head to Columbus instead. You stay the course.
If you have some extra cash, don’t be shy about continuing to buy in at these discounted prices (it’s a flash sale, and who doesn’t love a sale?!?). (Dabs: I do love a fire sale!)
That way you’ll be buying at low stock prices, and the stocks should be worth substantially more when you’re spending down assets in the far away future. If you stop investing in the market, you will potentially miss out on future return on investment when the market begins to creep up again.
When traffic piles up on I-94, you don’t question whether that road still gets you to Chicago. Markets should recover and traffic clears up.
Dabs: Thanks for joining us this week! Your home is just one asset in your portfolio, and I like to acknowledge (occasionally) that readers might have more on their mind than home ownership. If you’re in the market for a Certified Financial Planner ™, Lindsay is based out of downtown Plymouth and she’s great people.
About the Author
Lindsay is passionate about providing financial education and empowerment to each of her clients – and has a special affinity for working with women and young professionals. She works closely with each to truly understand their attitudes toward money, their hopes, concerns and more. She believes this is critical to helping them avoid emotional decisions so they can stay on track to accomplish their goals. Outside of work, she spends as much free time as possible outside with her husband, Mike, and young sons, Henry, Arlo and Isaac.
843 Penniman Ave, Plymouth, MI 48170
Tel: 734-667-1415 / 866-667-1425
Fax: 734-259-3074
lindsay.corneille@raymondjames.com
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