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Financial Residency


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:

www.WrenneFinancial.com