Three Things You Can Do to Build Long-term Wealth

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When it comes to investing, many of us are more terrified of losses we experience in the short-term, versus the potential gains we can achieve over the long-term. Money is a very sensitive topic for most folks and the idea of any loss is unnerving and frightening. I get that. But there will be ups and downs in the market and these could play to your advantage over time.

First, get a hold of yourself! That’s right, keep those emotions under control and remember that investing should be for the most part, emotionless. Irrational and emotional decisions can lead to catastrophe when it comes to your investments. For starters, turn off the market pundits and ignore the annual forecasts if you know this will upset you. Pundits and forecasters are all about having a January alert to apprise investors of the year ahead. But how many times do you pull that forecast up in December to see how right, or wrong, the forecasters got the market?

Second, you need to keep your ultimate goal in mind. Think long term…very long term! Stop worrying about today’s loss or this year’s bad market and definitely stop trying to time the market. Sit down with your adviser and craft a personalized, well-thought-out plan that meets your needs and serves your long-term interest, timeline and goals. Doing this makes market timing irrelevant because you will have a plan in place for the market of today, tomorrow and into the future.

Third, remember that markets go up and they go down. These fluctuations for the long-term investor are actually assets. Just like Warren Buffett, you too can avail yourself of the gift of a downturn in the market. Downturns are a great opportunity to load up on investments at lower prices – a sale! If you have an investment plan and are putting away money on a regular basis, these downturns can work to your benefit. If you have an adviser, you most likely discussed market volatility, risk and are better prepared to realize ‘this too shall pass’.

I’ve heard people complain, ‘I am close to retirement, I can’t suffer a downturn’.  This statement encapsulates exactly why they should have been working with an adviser. First, remove the emotion, other than being happy that you are about to retire. Second, remember your ultimate long-term goal? You shouldn’t be market timing. And, third, you should have already been working with an adviser even if you are retiring during a downturn; your planning should have you positioned to be ready for retirement regardless of the current market. If this is a fear for you, talk to your adviser. Most likely, your adviser started you on a revised investing allocation long before your retirement date.  

As an independent Certified Financial Planner™, I can help you with a strategy to address retirement and other investing goals. Contact me and let’s get started! #talktometuesday #savings #retirement #emotion #long-term #goal #warrenbuffett #plan #CFPPro