VOLATILITY IN THE STOCK MARKET

4 Sep
Canadian National Exhibition
Photo Source: BlogTO

WHAT DO THE C.N.E., THE STOCK MARKET AND YOUR BUSINESS PLAN HAVE IN COMMON?

Volatility in the stock market can look and feel like a midway ride at the “Ex”, especially when we are bombarded with words like TRADE WAR, RECESSION, CRISIS and PANIC.  It is however, important to retain perspective.  The media headlines are designed to get online and offline listeners, viewers and readers to listen.  Just look at the world stock markets. Yes, they have been up and down all summer like a roller coaster.  However, markets have enjoyed enormous growth over the last ten years, and despite the media headlines, it is important to remember that they will again.

I am sure your business results can be volatile from time to time.  However, when you stay focused on the long-term success of your business, you won’t be tempted to sell it when there is a dip in your results.  You hang on, make adjustments and get your sales and profits back on track.  You do this because you are focused on the future – one day you will have your company in excellent shape and ready to sell to the highest bidder.  Moreover, if a competitor is not doing well, you may be able to take over some of their customers or even purchase their business at a discount.

So how do the thrills, spills and chills of a roller coaster ride at the C.N.E. relate to your investments?

 When clients phone me to ask what they should do “Right Now,” we talk about their long-term goals and their time frame.  I remind them that succeeding in the market requires the right kind of motion and emotion.  By motion I mean that when the market dips, as it has lately, the right kind of movement forward may be to put in new money.  By buying now at lower prices than we’ve seen for some time, their investments will grow (the growth might even be thrilling!)  The emotion required is the courage to hold investments and to ignore a paper loss.  The worst emotion is panic or selling assets at a lower price today than you are likely to get in a month or two.  Some adjustments may have to be made but it is important to stay focused on your long-term investment plan.

Everyone knows that stock markets go through corrections.  Nobody knows exactly what would cause them this time around, nor when they were coming, and how long they will last.  We do know that markets go up more often than down.   As a goals-focused Financial Advisor, I prepare my clients for this volatility.  If some cash is needed in the short-term, we set it aside, and then we let the balance of the portfolio grow for the longer term.

Financial and business strategies plans have a lot in common.  Both start with planning and are focused on achieving goals within a certain time frame.  I have many innovative solutions to reduce risk. If you want to explore my approach to motion, and emotion, please email me or call me at 905-707-5220.

Get your thrills on the midway or the Food Building, and ignore the media headlines.

It’s just good advice.