Now that the initial Covid-19 dust has settled, the world is left on pins and needles, begging the question – what will happen next? Where can we expect the financial markets to go? Will they bounce back, sit sideways or go down even further?
While we all hunt for answers beyond the obligatory “no one knows” and “time will tell”, what you can do is stick to your plan.
As we all have our individual financials goals, the returns we need to reach them do not come in a symmetrical fashion. Markets are volatile, messy, unpredictable, but necessary. Year over year, we get returns that can be classified as good, bad, meh, disappointing, surprising, shocking or amazing. The key is to zoom out and pay attention to the average rate of return you require to accomplish your financial goals.
The financial markets in 2020 currently seem uncertain, but do we remember what those markets delivered in 2019? The returns were fantastic! We tend to get caught in the moment, focus on what is happening now and lose sight of the big picture. When we take a step back, this gives us a clearer picture for measuring the long-term productivity of your portfolio against the long-term required return of your financial goal.
The markets will ebb and flow year over year. Hopefully this brings some perspective to understand what matters in the long run, and the importance of a realistic strategy for accomplishing your financial goals as we have done in your financial plan.
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About the Author
Montgomery Gossen joined Billeaud Capital Management in 2016 as an Investment Adviser Representative. Montgomery previously worked for Advent Software, a financial reporting software firm based in Jacksonville, FL where he served several roles assisting financial advisory firms across the country. Montgomery earned a B.S. in Agricultural Business from Louisiana State University and is a Certified Financial Planner™…. Read more.