Page 24 - BusinessWest July 11, 2022

you are in your thirties and forties and are invest- ing in your 401(k), you could be very aggressive and have a large percentage of equities.
If this is the case, then you should be thrilled to make your monthly deposit into your account. You are buying stocks ‘on sale’ and you have many years to make up any temporary losses in your account. Even if you are a few years from retirement, and depending upon you situation, a bear market could be seen as an opportunity to purchase stocks at a discount.
A prolonged bear market for someone approaching retirement or a new retiree could mean making some changes to your lifestyle. For example, you could limit withdrawals from your investment account and/or eliminate panic sell- ing. When you withdraw money or sell in a bear market it is considered “locking in the losses.” Perhaps you can cut spending or pick up an extra job for the short term, until the economy is on more stable footing.
There are financial products available that could potentially be suitable in many portfolios. In some cases when determined appropriate,
an annuity could be used to create more stable income, a REIT (Real Estate Investment Trust) could be used to help diversity a portfolio and many insurance companies offer products with downside protection. Consult your financial advi- sor for different ideas to help address the volatility in your portfolio.
Perspective is key to a good night’s sleep when dealing with market volatility. Downturns are
a normal occurrence in the stock market. Since 1932, bear markets have occurred, on average, every 56 months (about four years and eight months), according to S&P Dow Jones Indices.
Make sure to keep emergency funds in the bank to keep market withdrawals to a minimum. Do not make rash changes to your portfolio. There is a saying that ‘time in the market beats timing the market.’ It is very hard to predict the exact best day to sell a stock or to buy a stock. Missing the best days in the stock market, over time, can seriously undermine your
performance. Having
a plan and sticking to it could yield the best results in the long term.
If you are a new inves-
tor, you may want to
proceed cautiously. One
potential strategy is to
dollar cost average any
funds that you have into
the market (spread the
investment over a period
of time). This way you
are buying at different
price points in the market. Dollar cost averag- ing involves continuous investment in securities regardless of fluctuation in price levels of such securities. An investor should consider their abil- ity to continue purchasing through fluctuating price levels. Such a plan does not assure a profit and does not protect against loss in declining markets.
No one is predicting when the market bottom will happen, and it is nearly impossible to time. I believe you should see to have a well-diversified portfolio with a mixture of asset classes, though there is no guarantee that a diversified portfolio will enhance overall returns or outperform a non- diversified portfolio. Diversification does not pro-
tect against market risk.
Always remember the adages “This too shall
pass” and “Time is on your side.” Those people that have been investing for a while have been through many economic downturns and have survived and, most likely, thrived if they have stayed the course and stuck to their plan! u
“
during this scenario but, eventually, the market finds a bottom and investors feel comfortable once again to begin buying, putting an end to the bear market.
Barbara Tromblay is a financial advisor and
CPA with Wilbraham-based Tromblay, CPA:
(413) 596-6992. Securities offered through LPL Financial. Member FINRA/SIPC. Advisory services offered through Trombley Associates, a registered investment advisor and separate entity from LPL Financial. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations
for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
It is a tough time to be an investor
”
You Worked Hard to Save for Retirement.
Now What?
Barbara Trombley, Financial Advisor, CPA
Mike Trombley, Financial Advisor, Former MLB Player
Since 1965
Call or visit our website
for more information:
(413) 596-6992 www.TrombleyAssociates.com
3 Retirement and Estate Planning 3 Investments
3 Social Security Review
3 Tax Strategies
Securities offered through LPL Financial. Member FINRA/SIPC. Advisory services offered through Trombley Associates, a registered investment advisor and separate entity from LPL Financial.
24 JULY 11, 2022
WEALTH MANAGEMENT
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