10 Things You Need to Do to Get Through This Volatile Market

1. Don’t react emotionally! This will result in a constant cycle of buying high and selling low.  Once you sell, you lock in your losses.  Stay the course and focus on what you can control.

2. Make sure you have an emergency fund of three to six months of expenses. 

3. Evaluate your asset allocation to be sure it is consistent with the timeframe in which you need to withdraw money.   The stock market is a long term investment; you should never have short term money in the stock market.  Make adjustments to your allocation based on your long term goals and need for liquidity not on fear.

4. Maintain a well diversified portfolio.

5. Pay-off credit cards and high interest consumer debt.  Be wary of variable rate loans, lines of credit and mortgages.  The downgrade in theU.S.credit rating could hasten an increase in interest rates.

6. Get your personal finances in order.  It’s always a good idea to understand your spending and keep expenses in line with your income and financial goals.  This is a good time to tighten your belt to be prepared for unexpected emergencies.

7. Use dollar cost averaging to invest new money into the stock market.   Volatility in the stock market creates great buying opportunities.

8. Don’t get caught up in the media hype.  They are in the business to sell newspapers, magazines and television commercials.   Avoid the new hot asset class they are trying to promote this week.  Sound investment advice is boring and doesn’t sell newspapers.

9. Take steps to secure or improve your income stream.  Are you performing up to speed at work?  Are you getting along with co-workers?  Should you take some classes to keep your skills current?  Are you underemployed or under paid for your education and experience?   Consider a second job to pay down excess debt.

10. Stay calm, be patient and focus on making sure your financial plan meets your long term goals and objectives.  Stay the course, this too shall pass.

 

 

About the author

Jane M. Young, CFP®, EA, MBA, CDFA

Jane M. Young is a Certified Financial Planner and co-owner of Pinnacle Financial Concepts, Inc. and Divorce Solutions, Inc. She has been a financial planner since 1996. She is also enrolled to practice before the Internal Revenue Service. Prior to becoming a financial planner Jane held several management positions at Digital Equipment Corporation and Quantum Corporation, where she worked for 14 years. Jane holds a Bachelor of Science degree in Business Administration from the University of Colorado and an MBA from the University of Colorado. She has also completed the two year Certified Financial Planner Professional Education Program with the College for Financial Planning.

Jane is very active in the community. She is the immediate past president of the Rotary Club of Colorado Springs and a past president of Leadership Pikes Peak. She is a graduate of the Leadership Pikes Peak class of 2004. She is a past president of the Financial Planning Association of Southern Colorado and a past president of the Pikes Peak Chapter of the National Association of Women Business Owners. Jane is also a member of the University of Colorado at Colorado Springs, College of Business, Alumni Leadership Team. Jane is a graduate of the Leadership Program of the Rockies class of 2009 and a graduate the Colorado Springs Leadership Institute class of 2011. She is also a member of the Estate Planning Council and Artemis. Jane was selected as a 2010 Woman of Influence by the Colorado Spring Business Journal.

As a fee-only financial planner Jane is a member of the National Association of Personal Financial Advisors, the Financial Planning Association, the National Association of Tax Professionals and the Alliance of Cambridge Advisors. She has been quoted in several local and national publications including The Wall Street Journal, US News and World Report, Consumer Reports, Investment News, MSN Money, Kiplinger Magazine, Financial Advisor Magazine, Bankrate.com and the Colorado Springs Business Journal. She also works as a volunteer instructor to new advisors with the Alliance of Cambridge Advisors and has worked as an adjunct instructor at the University of Colorado at Colorado Springs.

Jane is from St. Louis, but grew up in Colorado Springs. She enjoys skiing, golfing, traveling, hiking, painting and learning to speak French.

One Comment

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  • Hi Jane,

    We are a young couple with two young boys (5 & 3) and we are currently saving a down payment for a bigger home. I am wondering if we should risk our hard earned money ( 8 years of savings, but not that much really) in investing and trying to grow it faster. It seems that there are a lot of good buying opportunities but I am afraid to lose all our hard earned money. I want to ensure that we are safe as far as being able to keep our home and provide a good education for our kids even if my husband is between jobs. He is a geotech engineer and his job status depends on whether his company gets new jobs or not. So far it’s iffy and uncertain. I work part-time (because of the kids) in an academic research position with state pay/benefits. Should we speak to a financial advisor now and how do we pick someone trustworthy and worthwhile that is affordable? Do you recommend any online financial subscriptions like louis Navallier Investors place or The Motley Fool. What about Life and Disability Insurance? Help!

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