Although markets reward discipline, there are times that can be harder.
Markets Reward Discipline
2022: The US and global stock markets have been performing at a loss recently. There’s been economic and geopolitical turmoil in every region, hence the market losses.
Stock markets have been perceived as ‘overpriced’ and ‘ready for a correction’.
And while those sentiments may be accurate, it can feel discouraging when market losses occur.
The Fundamentals
And so, this is when you step back and remind yourself of the fundamentals of why you are saving and investing: To take care of and fund your future self and family.
This may be in the form of being able to quit work on your terms to pursue your dreams, or to buy a new home, or travel, or fund a cause you care about, or a multitude of other things.
How far away are these goals? Likely they are at least 10 years away (caveat: for those goals that are more near term, you should already have allocated a different set of funds to meet these).
Set and Forget
If you have done the work of finding a financial planner to create your financial roadmap, then you are able to ‘set and forget’ your portfolio.
A ‘set and forget’ strategy has been aligned to your target asset allocation.
And if you are able to ‘set and forget’, then you can ignore the turbulence that’s been in the financial and general news these last couple of months.
Since markets reward discipline, your portfolio will be on the trajectory to meet your financial goals.
You’ll feel more empowered by focusing on your goals, on the amount you are regularly saving, and on how well you are doing living below your means.
These metrics are progress you can measure in very concrete terms.
These are the things that will cause you to not react to market losses and second guess your portfolio.
These are the things that will cause you to stay the course and to keep your emotions in check during times of market losses.
So stay disciplined by staying the course, because just like with any other goal we have in our life, markets reward discipline and perseverance.
Next Step
Ready to take the next step and work with a fee-only CFP? Reach out to schedule a Discovery Meeting to learn more.