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Own Your Wealth with Confidence!


By Caroline Wetzel, CFP® T


, MBA, AWMA®


his year dynamic health, economic, and financial developments have tested the strength and resolve of people around the world. In February, the Dow Jones Industrial Average reached a high of 29,551 and the S&P 500 reached a high of 3,386. A little more than a month later, both had fallen by over 30%. Investors have experienced a vari- ety of emotions as they have watched the values of their accounts change rapidly and significantly.


While it is impossible to predict with certainty either when or how much in- vestments will rise or fall, it is possible to control pieces of your financial picture with conviction. Through careful decision and deliberate action, you can experience finan- cial confidence and own your wealth even in times of uncertainty.


Cover Your Immediate Needs Remember what flight attendants say as


you prepare for your long-awaited vacation? “In the event of an emergency, put on your own oxygen mask first.” The same principle applies for your finances. For you to contin- ue being the strong person you are for your family and friends during tumultuous times, it is essential that you ensure your own fi- nances are in order. As part of covering your immediate financial needs, consider:


• Reviewing your expenses


• Categorizing your cash outflows into “needs” versus “wants” versus “wishes”


• Prioritizing your immediate spend on only your needs, if required


• Managing your emergency savings; if you tap into them, prioritize replen- ishing them as quickly as possible


• Continue paying off your debts; if you pause any payments with your loan servicer, understand all terms, including whether interest will be accrued and when revised payments are required


Focus on the Long Term While it is unsettling to watch the value


of your investments change day to day, retain attention on why you are investing in the first place. You are putting cash to work in the financial markets today with the expectation that it will grow over time. There are inherent risks to investing, like the value of your individual holdings going up and down. That is why great care is neces- sary when investing to answer the following questions:


• For what purpose or future expenses do you want to invest your money?


• When do you need to access your money to pay for the future expenses?


• How much variation in the value of your money between now and when you need to access it can you handle?


When you answer these questions at the beginning of your investment process, you understand the risks that you are


taking with putting your money to work. Revisiting these questions when markets are volatile reminds you of the calculated risks you’ve taken and why. As a result of focusing on the long term and investing with intention, you have greater capacity to experience relative calm in market uncer- tainty, remain invested in the markets, and benefit from growth in your investments over time, as markets recover.


Take Advantage of Financial Planning Opportunities


Keep in mind that the markets are


like many business and life cycles. There inevitably will be ups and downs. Market downturns – while upsetting to experience – are not rare events. Since 1980, for instance, there have been:


• 12 Corrections: declines of 10% or more


• 8 Bear Markets: declines of 20% or more that have lasted at least two months


• 5 Recessions: declines in economic conditions for two or more successive quarters


When you are an informed and pre-


pared investor, you build into your financial plan that volatility will happen. You may not know when it will take place, or how severe it will be, but you expect that it will occur. As a result, when the downturn does tran- spire, you can use the situation as an oppor- tunity to enhance your personal finances.


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