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4 Things You Should Do in A Volatile Market

By: Clark Penney

March 2020

When all you hear about is market crashes, a global pandemic, and political uncertainty, it’s normal to start asking questions like, “Am I going to be all right?” and “How will this affect me?” And more often than not, our questions turn to financial matters: “Will my portfolio recover?” and “Will I lose income?” While the severity of these events is not to be minimized, we can battle fear and anxiety by educating ourselves with the facts, not only with what the headlines are declaring. With the recent volatility in mind, here are 4 things to keep in mind when it comes to your finances.

1. Don’t React; Research

This concept applies in many areas of life, but it’s extremely valuable to remember when it comes to making any hasty changes to your financial plan. News outlets want to catch your attention, which means they are prone to exaggerate information or possibly not include comparisons that would provide clarity about what that information means. This can be frustrating.

Here’s an example of a comparison that provides some context for how things can seem much worse than they really are. The stock market dropped 7% on March 9th, 2020, which was the largest drop in over a decade (*1).  But what wasn’t mentioned is that the stock market prices decreased to the same value as they were on January 9th, 2019. (*2).  Was anything important or scary happening in January? Nope. It was just the market fluctuation on that day.

2. Consider Long-Term Results

Now that we know to do a little research instead of making desperate moves to potentially save our money, here’s an analogy that will give us perspective as to how the stock market and our investments behave. People’s moods can fluctuate on a day-to-day basis and so can the stock market. However, if you look at someone’s personality over a long period of time, their moods average out and usually improve with maturity. This probably doesn’t apply to everyone you know, but stay with me! In the same way, the stock market is stable over a long period of time. The value of your investments also grow and mature with time, even with short-term ups and downs.

Here is a graph that shows this long-term stability, despite short-term market fluctuations. This is the Dow Jones Industrial Average (DJIA) over the last 30 years of how much investments are worth, which is a fair representation of the market as a whole if you are an average investor.

If you remember the 2008/2009 crash, as seen above, the market recovered really well. The market always recovers, and it will continue to do so.

3. Hands Off

If we take the information we know from the above two points, what’s going to happen if we ride out the waves of the stock market going up and down and keep investing consistently? We will experience growth, work toward financial security, and save ourselves a lot of stress when future downturns come.

When the stock markets go down, you can think of it like a Black Friday or Cyber Monday Sale, where stocks and mutual funds are on sale and you’re getting the best deal on your money. However, if you choose to sell back your funds, or sticking with our example, return a previous purchase you bought for full price, you will get a fraction of your money back. You’ll lose money.

If you consistently invest and don’t take any money out until retirement, you have nothing to be concerned about. Don’t become frantic and start selling back everything you bought for a much higher price. Let it grow and mature.

4. Talk To A Professional About Risk

You can do all the research you want, but ultimately, it’s extremely beneficial to talk with someone who researches this information daily and can help answer concerns specific to your situation and phase of life.

Depending on your age and financial situation, you might not feel like you have as much time to let the market bounce back. This is why it is even more crucial to make sure the types of investments you have align with your risk tolerance. Lower-risk funds don’t go up and down as much as some other more aggressive-growth funds. This is something to discuss with a financial advisor to make sure your investments are where they should be and are ready for future market swings.

Are you ready to see all your options for protecting your money and setting it up to succeed in any market environment? We at Cypress Wealth Services would love to start that conversation and answer your questions. Contact one of our offices to get started.


About Cypress Wealth Services

Cypress Wealth Services is an independent RIA firm providing financial planning and investment management to high net worth individuals, families, business owners, and institutions. Cypress Wealth Services comprises professionals with diverse backgrounds and extensive experience and qualifications. Cypress Wealth Services is uniquely qualified to serve a broad range of client needs, and their experience and expertise act as a foundation for their client service process. The firm uses The Second Growth, which focuses on efficiently protecting, growing, and transferring to their loved ones the wealth and legacy a person has already built. With offices in Palm Desert, CA, Tustin, CA, and Anchorage, AK, the firm serves clients across the country in Wealth Management Services, Fiduciary Services, 401(k) Design and Management, Investment Reporting Services, Financial and Retirement Planning, and more. For more information, visit or call 760.834.7250.