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Don't Get Caught Standing on the Sidelines!

Don't Get Caught Standing on the Sidelines!

August 18, 2022

Why working with a Financial Advisor can bring clarity during periods of uncertainty.


In today's market, everywhere we turn, being bombarded with negative news, either through social media, new outlets, coworkers, family, or friends, is inevitable. Your first reaction may be to sell off your investments to weather this storm. At least if you move your assets to cash, you won't lose any more money, correct?

As financial professionals, we hear this all the time during periods of uncertainty. The unfortunate reality is that the loss becomes real when you sell your investments when they are down in value. When you sell your shares, you do not have the opportunity to move with your assets, negatively or positively. You do not want to be standing on the sidelines just observing.If your investments are paying you a monthly dividend, you will no longer receive them. Not having the reinvested dividends means you miss out on the opportunity to purchase additional shares and increase your future income. 

So, what should you consider doing...including staying in the game?

  1. We recommend having a conversation about your long-term goals. When we last met to review your investment allocation, we matched your goals to your investment strategy to ensure alignment between the two. You may need to change your investment strategy if your plans have changed. 
  2. Time in the market builds investment returns, not timing the market. Remember, over the last 20 years, if you had missed just 30 of the best days in the market, your investment returns would have gone from 9.52% to 0.43% annually. So, stay invested and stay in the game
  3. Rebalancing your portfolio is a way to bring your assets back to their intended allocations so that your portfolio stays consistent with your goals and objectives. 
  4. The definition of dollar-cost averaging is systematically investing the same amount of money in the same investment options consistently, regardless of the positive or negative market performance. This type of funding can be beneficial because it allows you to buy more shares when the market is low and fewer shares when it is high. Over time this tends to reduce the average cost per share. Keep investing when the markets are down because you buy more shares of your investments. Remember, the more shares you own, the more income you get to participate in when your investments pay dividends. 

Call the office to schedule a meeting to discuss your long-term goals and how your investments align with them. 

If you have any questions, please reach out. We are here to help. To help others, please share this blog post.

Jacob Bierstedt, CFP®, ChFC® , Author

David S Dixon, CFP®, President

Rebalancing a portfolio may cause investors to incur tax liabilities and/or transaction costs and does not assure a profit or protect against a loss.
Asset allocation does not ensure a profit or protect against a loss.
Dollar cost averaging involves continuous investment in securities regardless of fluctuation in price levels of such securities. An investor should consider their ability to continue purchasing through fluctuating price levels. Such a plan does not assure a profit and does not protect against loss in declining markets.