#1: Have a Plan
The most important part of any long-term financial strategy is having a strong plan. Especially as you prepare for and approach retirement. It’s crucial to know what benchmarks you’re aiming for to ensure you’re on the right path, and what to do when you reach those benchmarks. Remember, a solid plan pays dividends over the years.
#2: Expect Pullbacks
The market is inherently volatile. It goes up and down. If it didn’t, there wouldn’t be any reward for investing. Even in the best years, there are pullbacks that can worry investors. However, these pullbacks are a natural part of the system. Without them, we’d see countless unpredictable bubbles and terrible crashes. Accepting that the market fluctuates is a key factor for long-term success.
#3: Don’t Panic
That being said, sometimes, things look extremely bleak and investors have a tendency to panic. This almost never ends well. For example, in 2020, when the pandemic first swept the globe, the market lost 34% of it’s value. However, by the end of the year, the market gained 16%. *It can be difficult, but staying the course and sticking to your plan is the only way to ensure long term success.
#4: Have a Safety Net
As you’ll be drawing from your investments come retirement, it might seem like taking a loss is the only option you have when the market takes a bad turn. This is why having a 3 to 6-month safety net is so important. Should the market fall as it did in 2020, having a safety net not only ensures you don’t take a loss, it leaves your money in the market for the rebound rally that generally follows such events.
Putting it All Together
Putting this all together may seem complicated, but at Starfox Financial Services, our team will work with you to create a plan that will weather the most volatile markets, and we’ll be here to guide you through both good times and bad. Start planning for your retirement by feeling out the Financial Planning Questionnaire!