Timing the Market
By Stone Wealth Management, Texoma LIVING WELL Magazine
Market volatility is an historic inevitability. There have been periods of decline throughout history, triggered by different types of events, many of which came swiftly and without notice. Trying to time the markets with consistent accuracy, determining when investments are at their top or nearing the bottom, is almost impossible, and it carries a number of risks to investors, especially those nearing retirement.
David. G. Stone, AAMS®, Senior Vice President – Investment Officer for Stone Wealth Management Group of Wells Fargo Advisors, LLC, suggests time in the markets is far more valuable than attempting to time the markets. “We know, of course, stock prices fluctuate from day to day, and markets ebb and flow over time, along with economic and business cycles,” Stone says. “Those saving for long-term goals may be less concerned about changes than people who are nearing retirement or who have already retired. While no strategy can guarantee against losses, there are ways to help ease the effects of market volatility in retirement.”
First, you may want to keep withdrawal assumptions conservative, perhaps withdrawing no more than a carefully budgeted amount from your portfolio each year. This approach may help provide a cushion against future market declines.
Second, maintain an asset allocation that reflects your goals and needs. By dividing your portfolio appropriately among stocks, bonds, and cash investments, you may help cushion against market setbacks. “Different types of investments react differently to various market conditions, so it’s important your portfolio is customized to fit your particular situation, which will likely change over time,” Stone says. “We want to help ensure your investments are working for you at every stage of your life.”
Third, review and rebalance your portfolio periodically. Adjustments in your portfolio will help ensure the asset mix is appropriate for current needs. As many people grow older, they may consider reducing their exposure to the markets by altering the composition of their asset allocation. To what extent you may need to alter your asset allocation mix depends on your situation.
Finally, work with a financial professional. The guidance of a financial advisor can always be beneficial, but it may be especially so in the years leading up to and entering retirement. This is a time when investors can be at their most vulnerable to specific market events, as well as normal fluctuations. Either way, an advisor can help you make informed decisions consistent with your financial goals.
Stone Wealth Management Group of Wells Fargo Advisors, LLC suggests, “The Smartest Investment is a Conversation.” The team is comprised of David G. Stone, Senior Vice President – Investment Officer, Juston J. Dobbs, MBA, CFP®, Vice President – Investments, and Lindsey Banks, Senior Registered Client Associate – Assistant Vice President. Their mission is to offer a multi-generational, multi-dimensional approach to providing unbiased strategies designed to help meet the lifestyle, financial goals, and investment needs of their exceptional clients.
Consider having an experienced team of financial advisors working for you at all stages of life. Call Stone Wealth Management Group of Wells Fargo Advisors, LLC, at 903-893-6682 to find out more. Or visit their website at www.stonewealth.wfadv.com.
Asset allocation cannot eliminate the risk of fluctuating prices and uncertain returns nor can diversification guarantee a profit or protect against loss in a declining market.
Wells Fargo Advisors, LLC, Member SIPC, is a registered broker-dealer and a separate non-banking affiliate of Wells Fargo & Company.
CAR # 1013-01749
Points to Remember
1. Although market volatility is a normal part of investing, it can pose serious challenges to investors, especially those entering or already in retirement.
2. Market declines in the early years of retirement can impact your overall retirement income strategy.
3. Maintaining conservative withdrawal assumptions may help maintain a cushion against future market declines
4. Maintain an appropriate asset designed to reflect your goals and rebalance it from time to time to help ensure that it continues to reflect your needs.
5. The guidance of a financial advisor can help you design an investment plan for the years leading up to and entering retirement.