When it comes to financial planning, predictability is often a top desire of investors. However, that’s unfortunately rarely what they get. In this day and age, predictability is hard to come by. A world full of ever-shifting technology trends and volatile global conflicts doesn’t make it easy for investors to read the proverbial financial tea leaves.
Then there’s the political climate. Regardless of where you land on the political fence, it is hard to deny that there’s currently an abundance of uncertainty. When looking at financial planning, all this uncertainty boils down to one question — how will this impact me, my investments and my future?
There is no simple answer to this as every case is unique. Nevertheless, there are four almost universal tips to keep in mind when it comes to financial planning in a tumultuous time.
Be proactive, not reactive. Financial planning is a marathon, not a sprint. One of the best ways to make it through tumultuous times without panicking is to engage in proactive investing. Instead of reacting to current events, stay focused on your individual goals and invest accordingly.
Invest systematically. Put your investing on autopilot and pick a day every month to invest new money. On that day, regardless of the market, ignore the noise and invest. Maintaining consistency will give you a long view when it comes to investing.
Call your adviser. When driving in unfamiliar territory, you use a GPS to give directions, provide traffic alerts and show alternate routes. When it comes to retirement planning, your financial adviser is your GPS. If you’re concerned about your investment plan, give your adviser a call for guidance.
History repeats itself. Today’s investing landscape seems more unpredictable than ever. Consider what people faced in the 1960s or during the world wars. History is marked with countless market movements, and although the underlying specifics may be different, we have always made it out the other side. We have been here before and we will be here again. The key is to expect the down years to avoid surprises and reactive investing.
Unpredictability can throw a wrench into any financial plan. However, it does not necessarily need to cause panic. By being proactive, investing systematically, consulting professionals and remembering past market movements will put you and your investments on the path to success.