Responding to a financial crisis
Humans have a powerfully instinctive drive to over-anticipate and overreact when there is a financial crisis. When it comes to investing for retirement, reigning in that desire to react can often be a major challenge.
In this month’s client’s corner, Nick Murray dissects the human tendency to overreact and the risk it presents to investors that have a long-term time horizon.
One of the greatest advantages you can have as an investor is a long-term perspective. Effective financial planning absolutely needs to take into account your short and medium-term goals, but the magic really happens when you take a step back and think big.
Financial markets are resilient. They have crashed, recovered, and reached new highs time and time again. Market fluctuations are a normal part of investing and the key is to remember that over time, the uptrends tend to outweigh the downtrends. Historically, the best response a long-term, goal-focused, plan-driven investor can make to a crisis is no response at all—or, more accurately, to just tune out the doom and gloom of financial news and continue acting on your plan.
We hope you enjoyed this month’s Client’s Corner. Please do not hesitate to reach out if you have any questions or feedback.
Thinking about hiring a professional to help you implement a long-term financial strategy? We would be more than happy to set up a 30-minute discovery call to get a better understanding of your unique situation.
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