Does the current volatility in the financial markets, uncertainty in the economy, unexpected world events, and political discourse cause you worry and concern? You might find yourself wondering “What should I do?”, if anything, or if you should wait for a calm in the financial turmoil to plot a new path forward.
As Financial Coaches at Hammond Iles Wealth Advisors, we stand by our clients and their families to guide you through challenging times of worry and concern. This allows you to live with more comfort and confidence around your investments and financial future.
Here are three simple steps you can take to create a clearer path during times of uncertainty and market volatility.
Step 1 – Identify Your Worries and Concerns
The first step is to understand the difference between a worry and a concern and identify your own uneasiness. A worry is defined as “to torment oneself with or suffer from disturbing thoughts.”[i] As the definition describes, a worry is something you create yourself. It is typically the result of fear from something you cannot control. You might worry about what the current administration or Congress will do or the health and wellbeing of the economy and financial markets.
In 2019 researchers at Penn State University conducted an interesting study to look at whether the things we worry about come true. Participants in the study were prompted four times a day for ten days to write down the things they worried about in the previous two hours. The study participants then reviewed their list of worries each evening over the following 30 days to see if any of their worries came true. The results were amazing. 91 percent of the worries were false alarms.[ii] They did not come true! In addition, one third of the 9 percent that did come true ended up having results better than what was expected.
With worry nothing gets better, and your mental health gets worse. Since a worry is derived from something you cannot control, it results in either inaction or an emotional reaction with no direct impact on the outcome. Worry will rob you of peace, comfort, and confidence.
A concern on the other hand, is related to things you can control. It is something you “relate to; [are] connected with; [are] of interest or importance to [you].”[iii] Since a concern is related to things you can control, you can act on these items to address your concern and create more comfort and confidence. For example, you may have a concern about the way your investment portfolio is invested or how the value fluctuates with movements in the financial markets. These concerns, like most, can be addressed by acting on them.
Step 2 – Let Your Worries Go, Act on Your Concerns
Let your worries go! Worries are based on things out of our control, so try your best to let them go. However, you can act on your concerns. Once identified, look at steps you can take around each of your concerns. Here are some things you can do to ease your fears surrounding the current economic and financial market uncertainty:
- Limit the news and information you take in.
A study conducted over 12 years by Dr. Jack Haskins at the University of Tennessee found that just 5 minutes of negative news can have a dire impact on your mental health. The study found that a group of study participants exposed to just 5 minutes of negative news on the radio multiple times over 10 days reported being more depressed, believed the world is a negative place, were less likely to help others, and began to believe that the negative events they heard would soon happen to them.[iv] Don’t underestimate what even a little negative news can do to your comfort and confidence. Take control of the information and news you allow into your life.
- Get a better understanding of what you are invested in and why.
Is your portfolio allocation selected and based on academically based, empirically tested science or is it a compilation of “educated guesses” by you, your investment advisor, or mutual fund managers? If you do not know how the investments in your portfolio were selected, why you own them, or how the amount invested in a selection within your portfolio was determined, it is time to ask questions so you can gain a better understanding of your investment portfolio. If you are not sure what you are invested in and would like to learn more about a portfolio, Hammond Iles Wealth Advisors can provide you with a portfolio analysis, simply click here to schedule a time.
- Deepen your knowledge of how your portfolio is designed to manage market volatility.
Your investment portfolio, like your physical health, can be impacted by a variety of factors. Do you know how your investment portfolio allocation interacts with the financial markets and how market volatility impacts it? Do you know how much risk you are taking in your portfolio and how it reacts to changes in the financial markets?
- Use a financial plan to get a clearer picture of your financial future.
Many investors allow their life to unfold in front of them without knowing if they will have enough money to last their lifetime. A financial plan can help you prepare for retirement and feel more confident while living your life today, preparing for tomorrow and building a legacy for your family, favorite causes, and community.
These are ways to address your specific financial concerns. If you look closely at your concerns, which by definition you have control of, you can create actions toward gaining more comfort and confidence. And what if you are completely uncertain about what you should do? Proceed to step 3!
Step 3 – Get Support
Changing your worries and concerns into comfort and confidence can be challenging to do on your own. Being part of a community or finding a financial coach who supports you and provides guidance may help alleviate your concerns.
One effective way to create support for yourself is to join a community of like-minded people who have the same concerns as you do. Being part of a community of investors with similar intentions could help you become more confident and comfortable in times of financial market volatility and uncertainty.
At Hammond Iles Wealth Advisors we aim to make a meaningful difference for you and your family. That’s why we host online financial workshops to help people just like you make more informed financial choices. Our virtual community of investors will give you an opportunity to gather, ask questions, express concerns, and learn more about investing and what actions others might be considering.
You might also find it helpful to engage a knowledgeable financial coach to provide you with guidance and support. For investing and financial planning, consider working with a financial coach who can guide you through a process to:
- evaluate your portfolio
- determine the amount of risk you are exposed to
- assist you in potentially reducing your risk by investing in an academically based, globally diversified portfolio centered around your risk and return preference
- prepare a financial plan that acts as a roadmap to help you reduce uncertainty and guide you toward the future you desire.
Without taking these steps to address your worries and concerns, the media's constant bombardment with negative news, headlines, and online information can leave you in a persistent state of anxiety and depression.
Having a financial plan and a good understanding of your investment portfolio may allow you to worry less when the markets are in turmoil. We offer monthly online financial education workshops, an investing community, and a no-cost initial conversation with a financial coach for anyone who has questions on investing and money matters. If you are ready to take action toward gaining more peace, comfort, and confidence around your finances, contact us here or at (800) 416-1655 or hello@hiwealth.com to book a convenient conversation. We are here to help you and your family. Our firm has no minimum investment amount because we believe everyone needs a fair chance to get started.
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[i]www.dictionary.com/browse/worry as of 9/29/2022
[ii]https://www.psychologytoday.com/us/blog/think-act-be/201907/how-often-do-your-worries-actually-come-true
[iii]www.dictionary.com/browse/concern as of 9/29/2022
[iv]https://doi.org/10.1177/107769908406100307