When we look at our investment accounts, it can seem so unpredictable these last few months, and really this whole year. They go up and they go down, there’s big swings in the market, there’s an upcoming election, and it just seems like a lot of uncertainty out there. And you might be wondering if you’re doing the right thing.

A lot of people are thinking that as they’re seeing these ups and downs in their accounts.

But one thing we know is that markets and account values, they do go down. It’s inevitable and it’s normal, but what’s important is what you do during those times when things don’t feel as good.

So I’m going to go over two reasons why smart investors and retirees don’t worry when the markets go down. And then I’m going to share how we help clients achieve this sort of peace and comfort in their investments and their plans. If you can achieve these two things, then it’s going to help you feel better during scary times, and it’s going to help deliver a peace of mind with your finances.

And just so you know, it’s normal when you turn on the news to feel a sense of worry or anxiety. We know that this is the way that the news wants people to feel because what keeps our attention is not the good news. And the media does a good job of doing this. Also the financial media does a good job of doing that; they’re having us second-guess our finances and wonder, “are we really doing the right thing with our financial plans?” And they’re playing a game that smart investors don’t have to play. Successful retirees don’t have to play that game.

Here are two reasons why smart investors don’t worry when the markets go down.


They’re not invested the same way as the numbers that they see on the news. Back in March, we were seeing headlines about how the Dow was down 2000 or 3000 points, and the S & P was down 35 percent. Yet we know that we’re not taking on the full risk of what the markets are doing and the plans that we’re creating. And why is that? It’s because we’re diversified. We’re not just in one sector or one country or one asset class, but we’re really in a balanced mix.

And that mix is all based on the investor and their income plan. Now the Callan chart is an example of, and the case for, diversification. This is showing key indices and what they’ve done each year back to 2000, and we can see things like large cap, small cap, real estate, emerging market equities, and things like that, high yield bonds, and even cash. And as you can see, it really depends on the year. There’s never a clear top performer, and there’s never a clear bottom performer, but really it depends. And what this table highlights is the uncertainty inherent in capital markets.

Having a balanced and right mix for you is key. There’s really not one investment account that fits everyone. Personal Finances is more personal than it is finances. So it really depends on you, the individual.


Their investment plan is built on their income plan as well. So what this means is that before every investment plan that we build, we know what sort of income the client needs each year, and then we make sure that we have enough in their conservative bucket. Now that conservative bucket is considered the safe money that doesn’t get affected by these big market swings that we saw, and hopefully we’ll see in the future. This is so important because if we know that somebody needs a hundred thousand dollars a year and they have 500,000 in the safe bucket, then this gives them five years worth of withdrawals. And that allows our clients to feel better because they know that they can let those investments that are going up and down stay invested, and they don’t have to worry about selling them when it is a down period.

If you’d like to get a better idea of how your plan is set up, and if it’s right for you, then you can head over to streamlineplanning.com for a free planning session. I’d love to talk with you and go over your plan. And if you have a friend who brought up concerns or they’re thinking about the economy or the elections or their investments, then please share this video with them. And hopefully it could start helping them think proactively about what to do during these interesting times.