DIRECT FROM DENNIS - March 2024

Staying the Course in Volatile Financial Markets

Navigating the ups and downs of financial markets can be challenging, especially during periods of unexpected volatility. And although it “seems different this time”, maintaining a disciplined approach can help you stay on track toward your long-term financial goals. Here are some key strategies to consider:

Focus on Long-Term Goals

Short-term market fluctuations can be distracting and stressful, but it's important to remember why you invested in the first place. Whether you're saving for retirement, a dream home, or your children's education, keeping your long-term objectives in mind can help you stay calm and avoid impulsive decisions

Diversify Your Portfolio

Diversification is like a balance pole for a tightrope walker—it helps you stay steady. By spreading your investments across different asset types (stocks, bonds, real estate, etc.), you reduce the risk of a significant loss in any one area. This approach can smooth out the ride and prevent you from making hasty decisions based on temporary market swings. And remember, volatility may cause your portfolio holdings to go out of balance with your original risk objectives. Therefore, rebalancing may be necessary to re-align your portfolio to your original investment strategy.

Manage Emotions

Investing based on emotions can lead to poor decisions. Avoid checking your portfolio daily, as this can increase anxiety. Instead, consider these tips to stay grounded:

• Avoid checking your portfolio daily, it only makes you more impatient.
• Stick to your investment plan. Just because the markets move does not necessarily mean that your strategy should change.

Turn Off The Noise

The 24-hour news cycle thrives on drama. While staying informed is important, constant exposure to negative news can lead to unnecessary stress. A better approach might be:

• Limit your financial news intake
• Follow trusted sources with a balanced perspective
• Focus on market fundamentals rather than sensationalized stories. Remember that headlines are designed to catch your attention, not to provide level-headed investment advice.

Maintain a Cash Cushion

Having cash reserves can be a lifesaver during market downturns. Keeping 3-6 months' worth of essential expenses in an emergency fund ensures you won't have to sell investments at a loss to cover unexpected costs

Consider Dollar-Cost Averaging

Dollar-cost averaging involves investing a fixed amount of money at regular intervals, regardless of market conditions. This strategy can reduce the impact of market volatility and help you avoid trying to time the market, which is nearly impossible even for professionals

Summary

Weathering market ups and downs is part of investing. By focusing on these strategies, you can maintain perspective and navigate volatile markets with confidence and stay the course toward achieving your financial goals. Remember, investing is a long-term journey, and short-term fluctuations are a natural part of the process.

If you are feeling unsure about your portfolio or your risk tolerance, let’s talk. A quick check-in may help make sure your plan is aligned with your needs so you can sleep better at night, no matter what the markets are doing.