Ever heard of that expression?  Yes…No…Maybe?  Either way, it surely paints a revealing image.  Perhaps it represents a youthful memory of a warm summer day when conventional norms gave way to a more personal expression of free spirit.  Unfortunately, in today’s highly volatile stock market, this expression is one among many clichés used by securities brokers and investment analysts to highlight the perils of undisciplined investing.  In this scenario, not only could you lose your shorts, you may not be prepared for the exposure or the next wave.

There are other market expressions that you may have heard. “Everyone looks like a Genius in a Bull Market.” or “Cut your losses.  No one ever went broke taking profits.” And of course, “Make sure you know where your Money is at the Closing Bell.”

Confusing?  I bet.  The past few weeks have been disconcerting to even the most disciplined investors. It is difficult to see hard earned capital decline in value.  The good news is, you could be ready for troubled waters as well as take advantage of the next wave that is sure to come.  History shows that corrections and market downturns are normal and healthy.  If you know your long-term goals and manage your risks accordingly, sound principles can get you through almost anything.

As a Certified Financial Planner ® I advise clients, friends and family to develop investment strategies only after utilizing a wholistic approach to their total financial footprint and goals.  I inquire about retirement income expectations, their view on healthcare or long-term care needs, tax issues and estate planning opportunities, legacy planning for children, charitable causes, and more.  Only then can I assess goals and risk tolerance and confidently recommend Investment portfolios.   Portfolios that are built and stress-tested using programs that measure success rates in various market environments.

As unpleasant as down markets are, the process should anticipate such declines and allocate accordingly. Simply put:

You should be able to measure risk in advance of volatility, not in reaction to it.

This is even more critical for those approaching retirement or early retirees with assets still being managed by employers or by some far away group portfolio manager that barely know your name or really understand what you are trying to accomplish.  Believe it or not, I see more people anxious about who cuts their hair or does their nails, than I see concerned about who is managing their life’s finances.  Shocking but unfortunately true.

I implore everyone who reads this blog to find a financial professional they can trust, preferably a certified financial planner who is held to strict ethical standards to ensure financial planning recommendations are in your best interest. If the start of 2019 is any indicator of what is to come, you’ll need that kind of partnership and stewardship…or else, a steady hold on your bathing suit!

I would love to hear your thoughts on this.  If you have any questions, concerns or just want to talk, I am here.

Sincerely,

Mr. Eric D. Bailey

Eric D Bailey is a registered representative of Lincoln Financial Advisors Corp.  Securities offered through Lincoln Financial Advisors Corp., a broker/dealer (Member SIPC). Investment advisory services offered through Lincoln Financial Advisors Corp., a registered investment advisor. Insurance offered through Lincoln affiliates and other fine companies Bailey Wealth Advisors is not an affiliate of Lincoln Financial Advisors Corp.