7 Ways Your Advisor Can Help You Remain Grounded During Turbulent Times

This year has proven challenging for investors. The combination of high inflation, rising interest rates and a bear market has resulted in the third most volatile market in 25 years.1

A bear market is defined as a sustained period of falling prices, usually when equity securities experience a 20% or greater decline from recent highs. While there’s a tendency to think of bear markets as negative events, they can present strong buying opportunities while prices are depressed. Nonetheless, periods of increased volatility also create uncertainty, which can lead investors to make decisions that may not be in their best interests.

Often, this is true even when people understand that, historically, the stock market has consistently bounced back from downturns and experienced more positive than negative years since this data was first tracked in 1929. While the current bear market is the eleventh since 1950, it’s only the fourth to occur outside of a recession. This non-recessionary characteristic is an important factor, since these versions of bear-market periods are usually shallower and lead to a swifter recovery than the majority of declines that occur during recessionary times.2

While economists are mixed on whether the stock market’s rebound in recent weeks points to the end of the bear market, once thing we can say with relative certainty is that volatility is likely to continue in the months ahead. Because volatility and unpredictability go hand-in-hand, it can become all too easy for emotions to overtake reason if investors are not following a disciplined and repeatable investment process. That’s where access to a dedicated team of financial professionals and investment specialists working together to meet your needs can be critical.

Below we look at seven ways your advisor can help you remain grounded and on track toward your goals in any market environment. In addition to helping you put a disciplined investment strategy in place that’s aligned with your goals, risk tolerance, and timeframe, an independent wealth advisor brings the resources and experience to:

1. Serve as a sounding board, coach and voice of reason, helping you to avoid behaviors that could derail your long-term goals.
2. Educate you on what’s taking place in the markets/economy and the potential impact it may have on your strategy.
3. Discuss proactive steps you can take to rebalance your portfolio to get back to your original allocation or modify your allocation if you feel your risk tolerance has changed.
4. Recommend opportunities or investments to consider while the markets are down (i.e. purchase more shares at lower prices) and coordinate these actions.
5. Advise on how to best draw income from your accounts to avoid cementing losses in a down or increasingly volatile market.
6. Help you reprioritize goals or evaluate trade-offs if your priorities or economic circumstances have changed. For example, you may decide to retire earlier or later than planned, or delay purchasing or selling a home based on current economic or market conditions.
7. Hold you accountable to your long-term goals so you remain on track toward accomplishing the things that you and your family want most out of life.

As your single point of contact, your advisor should be able to coordinate the advice and services you receive across all aspects of your financial life, including any outside legal and tax advisors you already work with and access to specialists across multiple financial disciplines who can weigh in on more complex challenges. This helps to instill confidence that the advice you receive is aligned with your personal goals and objectives and consistently reflects the collective knowledge and experience of the full team of resources available to you. Having a well-conceived plan in place to help you remain on course toward your long-term goals in any market climate also alleviates the need to worry about what the markets are doing on any given day. That provides more time to focus on the things that are important to you, your family or your business.