Financial Commentary: Is your financial plan still on track? | Company

When the stock market experiences declines, it has the potential to induce changes in investor psychology and behavior that are rarely beneficial. It’s always tempting to think that the stock market might not recover.

As I was thinking about this, I thought about an exercise that I had asked many clients to do in early 2009. Back then, markets were down even more significantly than they are now , and the temptation was great to think: time is different. This slowdown is among the largest we have ever seen.

A different perspective

During this severe recession, I invited clients to come and review their financial plans. I told them that we were going to assume that the markets would not rebound, assume only average financial returns from then on, and make all projections based on depressed market values ​​at that time.

Some things surprised me in this exercise. I was surprised that some clients I thought were keen on doing this exercise weren’t. When I inquired about it, they indicated that they tried not to be too careful and weren’t worried. But I had several clients who accepted the offer. When we analyzed the numbers, we found that most of them were still on track to meet their financial goals, even using these depressed asset values. They were very comforted by this idea. For the few customers who found they weren’t quite where they wanted to be, it was clear they were still close and even with a bit of a market rally they would be back on the right track. see very soon.

An optimistic outlook

The biggest surprise I noticed was a change in attitude. Once my clients saw that they were still on the right track, almost all of them instantly became more optimistic. Their conversations turned to ways to take advantage of the downturn and to the best opportunities.

In early 2009, one of the things I told people was that 10 years from now there will be so many stories people will have about how they almost invested in ___________ and wished have succeeded. Over time, I heard more and more of these stories, and everyone who had one looked at it with humor.

If it’s been a while since you’ve updated your financial plan and you’re not optimistic about the current situation, it’s probably a good time to consult an advisor and see if you’re still on the right track. way. Assuming you were on track before the downturn, you’ll likely find that you still are. In many cases, getting this new assessment of your situation allows you to refocus on the opportunities a bear market may present rather than the extent to which the value of your assets will decline. In general, successful long-term investors focus on opportunities rather than downturns.

David Jackson, MBA, CFP®, C(K)P™, is the Managing Partner of Southern Springs Capital Group. For more information about Southern Springs Capital Group, visit www.southernspringscapital.com. Our offices are located at 2555 Meridian Boulevard in Franklin. We can be reached at 615-905-4585.

All opinions are those of Southern Springs Capital Group and not necessarily those of RJFS or Raymond James. The information contained in this report does not purport to be a complete description of the securities, markets or developments referred to herein. There can be no assurance that the trends mentioned will continue or that the predictions will occur. The information has been obtained from sources believed to be reliable, but Raymond James does not warrant that the above information is accurate or complete. Any information is not a complete summary or statement of all available data necessary to make an investment decision and does not constitute a recommendation. Investing involves risk and you can make a profit or loss regardless of the strategy you choose. Past performance does not represent future results. Diversification and asset allocation do not guarantee a profit and do not protect against a loss.

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