View from the Chair: Windermere's Market Perspectives (September 2019)

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Turn on the TV, pick up your phone, or read most major newspapers as of late and you are likely to walk away with a rather unsettling feeling about investing. There is a seemingly omnipresent supply of confusing terminology (ie: yield curve inversion, recession, tariffs, trade war) and an equal supply of doomsday predictions. All this “noise” can cause anyone to lose their focus and confidence in their approach.

To help with this, we’ve put together five suggested actions you can take today to refocus and stay on track over the long term.

1.) Revisit your goals

I know what your’re thinking - “everyone gives this generic advice.” Perhaps you’re right - but I’d argue that it’s for a good reason - because it’s sound advice! Pulling ourselves out of the immediate daily action and directing our attention to our bigger picture goals is essential. How can you do this? Ask yourself a few questions: What is my longer-term return expectation? Will moving to cash/exiting the market increase my odds of reaching that? Do I need any money from my invested assets in the next 3-5 years, and if so, how much of that amount is already in cash or bonds that I can readily access? If I’m saving on a regular basis (ie: via a 401k paycheck contribution), is it so bad to be putting more money to work at lower levels? Is any area of my life really at risk given the decline in my investments - or do I have time to stay the course and trust in the process? Elevating the discussion always seems to lower the nerves

2.) Play the Next Shot

Hindsight is an investors’ worst enemy. It is so tempting to be drawn towards looking backwards - questioning things you should/could have done, being drawn towards safety at the exact wrong time, focusing on what could have been if you had only done XYZ. Fight this urge. The only “shot” we have to play is the next one. See #1 above - you’ve already outlined the entire game, so it should be relatively easy to see what the next shot should be.

3.) Buy low

Markets may be the only place of commerce where people prefer to NOT buy things on sale. If an asset class falls (and you are underweight in your overall allocation as a result of the decline), consider redeploying some funds in its direction. Keep a shopping list of companies (or ETFs or funds) that meet your criteria and as their prices come down, maybe you can buy them on sale!

4.) Stretch it out

Investing technology has come a long way. We used to have to wait for monthly statements to see the change in value. Now, we can watch the green or red figures and percentages second by second on our phones. Focusing on a day’s change (or even a year’s change) is a little short-sighted. Odds are you have been investing for years, if not decades. Stretch out your return time frame. How have you done in the past 5 years? The past 10 years? Since you started? My guess is that you have built wealth thru your investing efforts over time

5.) Talk it out

If we are left alone with our thoughts (or with CNBC on in the background on repeat), we can engage in a lot of inner dialogue and self-doubt. One of the best ways to combat this is to talk it out. Share your feelings with a spouse. Reach out to your financial advisor and review your financial plan. Don’t try to go it alone. Get your thoughts and concerns out in the open. Just by doing this, they often times don’t feel nearly as daunting

Invest on,

Pam