Why jumping in and out of the markets doesn't work
Submitted by Beacon Financial Planning of Cape Cod, Inc. on April 30th, 2020Thursday, April 30th, 2020
We want to thank you for your continued trust. The reason you hired our team is to navigate you through times like we are experiencing now.
Although it's tempting to see the recent partial bounce back in the market and want to "cut your losses," we remind you that jumping in and out of the market is detrimental to your financial planning goals.
We urge you to look at the pieces of your financial plan you can control. How is your cash flow? Are your portfolio withdrawal needs the same today? If not, please contact us and we can reduce your current withdrawals in effort to buy more time.
We continue to hold portfolio reviews, only now they are virtual. Financial Planning is not a space for cookie cutter advice. That being said, we encourage you to email us if you are concerned about current cash flow.
One shift we have made is the amount of cash we pro-actively create for clients. Normally, we pro-actively create 9 months worth of withdrawal needs and 5 quarters worth of wealth management fees and leave them in cash. That way we have adequate cash for any near term needs. Currently, we discuss the withdrawals with clients and determine if it makes mores sense to create 3-9 months worth of cash.
The following chart shows the risk of market timing and the effects of missing the best month of annual returns.
The investment strategy we've mapped out for you is a long-term plan based on your personal goals and risk tolerance. As always, please contact us should you have any questions or concerns.
- Alina Leon is here for all your scheduling needs - Alina@bfpcc.com
- Melissa Kolcz is here for any beneficiary updates or paperwork requests - Melissa@bfpcc.com
- Katie Brennan Kane is here for all your operations and investment requests - Katie@bfpcc.com
- Kelli Grew is here for your financial planning and investment needs - Kelli@bfpcc.com
- Michaela is here for your financial planning and investment needs - Michaela@bfpcc.com
With gratitude for your trust,
Your Team @ Beacon Financial Planning of Cape Cod
