DIY investor in times of market volatility?

Chances are you’ve decided to manage your investment portfolio yourself either because:

1. You know you have the knowledge and time to do so or
2. You disagree with dealing with investment advisors. Who want to sell you expensive investment products or charge you commissions above 1% to manage your money.

The critical thing to know. Is that during uncertain stock markets, where it is virtually impossible to predict what will happen. Investors must be cautious to avoid the following situations.

1. Inactivity:

If investors feel overwhelmed by the decisions they must make, they may decide to delay action until they gather more information. However, this inaction and attempt to “time the market” can result in their money sitting idle in a cash account, not earning a good return, and doing nothing while they wait for the perfect time to invest. An hourly financial planner can help avoid this by providing timely advice and encouraging proactive management.

2. Panic:

Selling is one of the most damaging actions an amateur investor can take. Although they may believe that selling everything to avoid further losses is prudent, these emotional reactions often lead to the most significant setbacks. Selling based on thorough research and a well-structured plan is acceptable.

Still, if the decision is impulsive and driven by stress, it likely indicates that the initial investment mix was not suited to their needs. Consulting a fiduciary advisor, such as a Certified Financial Planner, can help prevent panic-induced decisions.

3. Not knowing when to exit:

Most amateur investors need help determining the right time to exit a stock. When a stock they own falls, they often hold it, hoping for a recovery. However, prices may continue to fall. In some cases, it is critical to sell a stock on a steady downward trend that is unlikely to recover shortly.

An hourly financial advisor can guide optimal exit strategies and provide a second opinion. Navigating market uncertainty presents significant challenges for amateur investors, who may need help with inactivity, panic selling, and timing of exits.

These mistakes can substantially impact the value of your portfolio and overall financial stability. To mitigate these risks, following a disciplined investment strategy and seeking professional fiduciary advice when necessary is essential.

Instead of succumbing to fear or greed, investors can benefit significantly from a disciplined and strategic approach to managing their finances. This is where the experience and expertise of an experienced fiduciary hourly financial advisor or certified financial planner prove invaluable.

Now that we’ve looked at the reasons why it’s not advisable to navigate market storms alone, here are a few reasons why working with an Hourly Financial Advisor can help you navigate market volatility and stay on track toward your financial goals while rebalancing your portfolio in line with your objectives:

Strategic Planning:

Financial advisors work with clients to develop customized financial plans based on their individual needs, goals, and risk tolerance. These plans consider asset allocation, diversification, and risk management strategies, ensuring clients are well-prepared to handle market volatility and achieve their financial goals over time.

Financial advisors also integrate clients’ short-term needs with their long-term financial goals, providing a balanced approach to investment management. By leveraging their expertise, they help clients stay disciplined, even during turbulent market conditions, ensuring that financial strategies remain effective and aligned with changing personal circumstances.

This is where, without having to leave the management of your portfolio, people are looking for financial advisors who work for periodic or one-time consultations and support them with this strategic planning process.

Continuous monitoring and adjustment:

A successful investment strategy requires constant monitoring and modification as market conditions evolve. Being one of the most used modalities for this type of operation, having a straightforward recipe for your portfolio, knowing what percentage you want to have in each asset, and applying rebalancing mechanisms when your positions move from the value you had stipulated for them.

Lower risk of making bad decisions:

Volatility often generates fear and uncertainty, which can lead to hasty decision-making and long-term financial consequences. We know that finances must respond primarily to rational processes and not just to some news or information you saw on social media. This is where a Financial Advisor who works by the hour empowers you with technical reports on a particular stock or bond, helping you understand the risks and possibilities associated with each option, and thereby boosting your confidence in making informed decisions.

Remember your goals or objectives:

It is essential to periodically remember the financial objectives or goals you have set for yourself, particularly in times of volatility in the stock market. Whether it’s due to an upcoming presidential election, a situation of war, recession, inflation, or other factors, staying focused on your financial goals is key to navigating market turbulence.

Remember that your investment portfolio must be created to reach the goal you have set for yourself. Therefore, it will be standard for periods of volatility when you are tempted to change your assets because something, in particular, is happening, and you feel that you must change or move something in your portfolio.

Periods of uncertainty will always cause the balance of your investment to move, but if you are transparent about your destiny and your finances have not been affected, remember that you should not change your portfolio.

This is where you can consult with a Financial Advisor who provides hourly services and wants to avoid managing your portfolio, whether you want it to be virtual or through a platform such as Zoom, and help you review your portfolio. Or because you live in Palm Beach County, Florida. This validation from a Certified Financial Planner allows you to have the peace of mind that you are taking the right actions.

Communication:

They regularly update market trends, economic indicators, and investment opportunities. This constant communication ensures clients know that portfolio rebalancing is needed to stay aligned with their financial goals. Financial advisors can rebalance a portfolio if it is not on track. By maintaining regular contact, financial advisors help investors make informed decisions and ensure their portfolios stay balanced and on target.

Financial education:

An Hourly Financial Planner does not have as a priority managing the assets or portfolios of his clients. He is focused on raising awareness among those who hire him about the best way to manage their investment portfolio, considering their current reality and their medium and long-term objectives.

That is why it is in their interest that their clients periodically educate themselves financially so that they are capable of making the best decisions on their own without having to hire an advisor for an indefinite period or enter into an emotional conflict that they cannot change advisor, even if this one is not generating value for them, only because they feel a kind of “security” based on the fact that this is the advisor they have been working with for a long time.

They are afraid to give that trust to someone else. Education is the basis of most correct decisions since knowledge is an asset no one can take away from us. That is why a Certified Financial Planner (CFP) will always be bold in offering you all the necessary information so that you can educate yourself on different financial topics and develop a critical vision about what happens around your finances. This way, you will know which Financial Advisor works with fiduciary criteria and which does not.

Financial education can be given through videos, blogs, guides, podcasts, interviews, and more. Here is a page where you can find a lot of information of this type: https://advise-financial.com/resources/.

Emotional Intelligence in the face of adversity:

Many times in our daily lives, we think that we have great emotional intelligence until we enter adversity and a storm of stressful situations, anxiety, and fears, which do not let us think clearly. We have already said in the previous paragraphs that this can lead to bad decisions.

However, we have yet to be told that certified financial advisors develop great emotional intelligence throughout their careers in the face of market volatility. This happens because periodically, throughout all their years of experience, they face and manage very variable moments in the market, which they manage to overcome and from which they manage to get out most positively and successfully possible. Therefore, a certified financial advisor will make decisions without falling into the despair of losing, but rather understanding that it is a moment that will pass, but that requires us to be thorough and act from reason, not emotion.

Where to find a Certified Financial Planner?

If you are looking for these types of specialists, you can find them on the CFP website. They have a directory to view specialists and choose one you feel comfortable with. Additionally, on the NAPFA website, you can find several professionals with this certification who can help you.

When it comes to financial planning services, the choice is crucial. It’s vital to distinguish between those who offer independent advice. And those who integrate it into their asset management services. We recommend finding a professional who provides financial planning on an hourly basis or through a comprehensive package. This ensures an unbiased and personalized assessment of your financial needs.

In conclusion, navigating market volatility can be challenging for amateur investors. Leading to inactivity, panic selling, and timing errors. These obstacles can undermine long-term financial stability. Partnering with an hourly financial advisor helps mitigate these risks by offering strategic planning, ongoing monitoring, and effective communication. Ensuring your investment strategy remains resilient and aligned with your goals.

Also, if you are thinking about retirement, it is wise to seek this type of advice so that you not only meet your short and medium-term goals but if you are still in your working years, earning benefits. And of course, paying taxes based on them, it is a good time for an hourly financial consultation, so that you can check if your portfolio is on the right track. And if you have some opportunities for improvement, now is the time to pursue them. Proper financial planning is essential to ensure a safe and comfortable retirement.

 

Alonso Rodriguez Segarra – CERTIFIED  FINANCIAL PLANNER™

Which provides hourly, fee-only, and fiduciary financial planning services. He has   over 20 years of experience in the financial world and has been named among the   Top 100 Financial Advisors in the US by Investopedia.

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Note: The comments given in this guide are for educational purposes only. Before    making a financial decision, consult your financial advisor or conduct appropriate      research. Remember that historical results are not a guarantee of future returns. In    the comments provided, this guide does not consider tax impacts. Always consult      your particular case with a specialist. We are not your financial advisor, so             remember that each case differs.

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All rights to this guide are reserved, and the occasional mention of third-party       brand names is made solely for educational and reference purposes, without any       interest in financial gain. This information is for educational purposes only and     does not represent an offer of products or services.