An informal note to clients (you can read it too)

Whelan Financial Planning - Wednesday, September 09, 2015

An informal note…

This link takes you to a chart showing the performance of the S&P 500 since August 2007.  I have highlighted some of the stock market blips that occurred since the crash in 2008 to early 2009.

We have experienced some volatility lately.  It makes me nervous.  I can’t (and won’t) predict what will happen next.  Charts like this help me keep things in perspective.

My intent is not to placate you by saying “don’t worry stocks will keep going up”.  If only it were that simple. 

If you have watched stocks make up a bigger and bigger percentage of your portfolio, I may have suggested that we make changes to “take some money off the table”.  (A very technical financial term.)  This is especially important if you have retired recently or expect to retire in the next two years.

If you tend to be more conservative, we have kept a close eye on the amount money you have invested in stocks and have rebalanced into bonds more frequently.  I hope you look at the chart and remind yourself that stocks can fluctuate, but the long term trend is usually up.  Think of the stock portion of your portfolio as the money you expect to use in 20 or 30 years. 

If you have 10 to 20 years to retirement, I still might suggest taking some money “off the table” to protect the gains you have earned over the last 6 to 7 years.  Invest your new 401k contributions more aggressively.  That way you will buying stocks when prices are low or prices are high.

Let me tell you about one of the things that make me nervous.  As a member of 2 (fee only) financial planning organizations, my colleagues and I will get press requests for comments or “advice” on various topics. From August 21 through August 25, the S&P 500 fell over 11%.  We received a high volume of press requests over that period of time, especially on Monday, August 24th. 

“What are you telling your clients?!?”

“Are your clients calling you?!?”

“What should people do?”

“Are we headed for a market crash?”

No wonder I get nervous!  All the questions make me think I need to DO SOMETHING!

If you are listening to or reading the news you may be anxious too.  If you are anxious, don’t hesitate to call or drop me an email.  We can jump up and down together shouting DO SOMETHING! (Another technical financial term and sophisticated investment management strategy.)

Seriously, I’m fortunate to have worked with most of you for many years.  I’m here to remind you to stick to your plan.  I’m here to listen to your concerns and if you want to make changes to your plan, we will work together to figure it out.

Stay calm, the next few months could be bumpy – or not!