We had a very turbulent financial year in 2018. We saw amazing gains in January which were more than wiped out in February. We had an October and November whose combined correction was more than enough to wipe out all the gains for the year and place the US market firmly into negative territory. And this isn’t even considering the bloodbath that we saw in the Asian Emerging Markets.
There’s an interesting phenomenon in all this. Some people, very correctly, question why they should pay a financial adviser to assist in their financial matters at all. In this day and age, information is freely available, markets are mostly transparent and open, products are easily available. What possible value does a financial adviser possibly add to their well-being?
It’s a fair question.
When times are good, as we saw in the recent bull runs, anyone can make money. Arguably, you could throw a dart at a board of stock names and be fairly confident you would hit a winner. It’s just a matter of time and patience. But that’s not the difficult part. It’s when times are bad that a financial adviser truly shines for you.
It’s not that a financial adviser can outperform a downward facing market, or that they are magically able to pick winners amongst a sea of red. It’s because of the calm and steady hand that a good financial adviser will provide to prevent you from making stupid, costly mistakes. Markets invariably go up. Recoveries occurring are just a matter of time. We have seen all too many people suffer declines of 25% in their portfolios, throw their arms in the air and sell everything, only for the market to recover without those same people being invested. And then they wonder why their returns are so poor.
The steadying influence that financial advisers can have on your portfolio matters in the long run. Being invested and remaining calm are not easy things to do in volatile times. But with a good, solid and sensible financial adviser, it’s a simple thing that you can do to ride through the waves. And after all, that, enjoy the rainbow of recovery at the end of the journey.
Read this article published on The Business Times as a recognition for our ethical practices on financial planning and strict adherence to the fee-only model.
Keep calm and stay invested. It’s more difficult than you think. Talk to one of our friendly financial advisers now. If anything, the coffee they offer will also help settle the nerves.
This is an original article written by Providend’s Editorial Team.
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