Mar 30, 2023
If you have been watching the markets lately, like I have, it's gotten a little dicey. It's been a while since we've had volatile down markets.
What should you do when your investments get shaky?
In this episode of the Finance for Physicians Podcast, Daniel Wrenne talks about what to do when your investments start tanking. Markets do go up and down. If you've been investing long enough, you realize that’s just the way it goes.
Topics Discussed:
• Downturns: People make big mistakes
and lose a lot of ground—and money
• What to do? There are some things you
should do and some things to avoid
• What is shaky market territory? People
get emotional when it gets more volatile
• What are natural reactions? These
feelings are normal:
◦ This time it’s different, but is it,
really?
◦ Are you tempted to find winners and
get rid of losers?
◦ Historically, people work through it
and recover nicely
• What’s not normal? Things get
completely backward sometimes:
◦ Past: Inflation was high, cash paid
nothing, and mortgage rates were low
◦ Present: Cash pays nothing, inflation
is very high, mortgage rates are up
• What are action items?
◦ Remember to refer to your financial
and investment plans
◦ Give yourself a little space between
the feeling and the action
◦ Educate yourself on how markets
work
◦ Recognize that the market is out of
your control for the most part
◦ Create awareness around human
investing behaviors/behavioral finance
◦ Rebalance investments and benefit from
tax-loss harvesting
◦ Change your pre-tax IRA or 401(k) to a
Roth conversion
◦ If you have extra dollars, put them to
good use and start investing
• What are questions to ask
yourself:
◦ What is the underlying concern?
◦ What is the money that I'm concerned
about? What's its purpose?
◦ When are you ultimately going to use
it? What's it going to be for?
Links: