David Lerner Associates: How to Outlast Market Ups and Downs

One important factor in your financial plan is how to invest your money. We’ve all heard stories of the wild fluctuations in the market and 401Ks losing half their value during the Great Recession. This is not an uncommon event – the market performance over time shows that there are always ups and downs.

If you are not an expert in the market, how do you outlast these fluctuations and feel confident that the money you’re working so hard to save will be growing steadily and will provide the comfortable retirement you’re planning for?

1. Don’t gamble with your savings. Any investment that offers high risk with high potential returns is a gamble. Once you have a financial plan in place, you can stick to the budget, and you’ll have money available to invest. Make sure that you talk to an advisor who can work with you to achieve your long-term goals with a ‘sensible middle-ground of investing’ strategy.
2. Take the long view. Aiming for a short-term fast profit may work occasionally, but finding an investment that is solid and has a proven track record over many years, despite the market fluctuations, may be a far better bet. [1] Slow and steady may win the race.
3. Invest in sound businesses. Find businesses that have a great product and a consistent track record of success, no matter who is at the helm. "I try to buy stock in businesses that are so wonderful that an idiot can run them, because sooner or later, one will," says Warren Buffet. [2]
4. Invest in a diversified portfolio. Don’t rely on just one investment or sector. Almost any business can fail, no matter how big or successful. It’s wiser to spread the risk and add securities that track various indexes as a hedge against market volatility and uncertainty.[3]

There is no way to avoid market ups and downs. They have always happened, and they will continue to occur. The best way to outlast the fluctuations is to invest sensibly, and keep your eye on the long-term goal.

IMPORTANT DISCLOSURES

Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities.

To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable– we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

David Lerner Associates does not provide tax or legal advice. The information presented here is not specific to any individual's personal circumstances. Member FINRA & SIPC.