So much uncertainty being felt in the U.S. and around the globe surrounding a number of different issues, but especially right now with the spread of COVID-19. This is first and foremost upsetting from a human perspective, but then its exacerbated when we watch how the financial markets respond and see our retirement accounts lose so much ground.
At Maxima Wealth Management, it is a fundamental principle that markets are developed to contend with uncertainty, reacting in real-time as it sorts out and responds to all available information. Believe it or not, the recent declines actually demonstrate a functioning market.
While the markets are reacting to all new information as it continues to become available it is also pricing in possible unknowns. During increased uncertainty the risk associated is also heightened. This leads to an increase in returns that investors demand to assume that risk, which drives prices down.
No one can tell you exactly when the markets will turn around or by how much. We do know based on three similar historical events (SARS, Ebola, H1N1) strong evidence shows that markets rebounded quickly and decisively.1
As illustrated in the video link by Dimensional Fund Advisors below, what’s important is “Tuning Out the Noise” and don’t lose sight of your long-term investment plan. This is a time you may recognize the value of your financial advisor.
A trusted financial advisor will work with you to establish your personal investment plan that incorporates your personal risk tolerance and time horizon. Implementing this will create a portfolio allocated in a manner that is comfortable for you, with the understanding that uncertainty is a part of investing and the need to stay the course may ultimately lead to a more pleasant and beneficial investment experience.
At Maxima Wealth Management we assist our clients in developing a plan that meets their individual needs, we offer a structured, unemotional and highly diversified investment approach addressing risk management and helping you stay the course.
To learn more about how we can help you, contact us today for a consultation!