TREND WHEN IS THE RIGHT TIME TO MOVE YOUR MONEY IN TODAY’S MARKETS?

Knowing when to move or invest money can be challenging and stressful in today’s volatile markets. While there is no way to control or predict market movements, a financial plan that takes into consideration factors like your personal circumstances, tolerance for risk, and investment goals can help take some of the uncertainty out of your investment decisions. We don’t recommend making critical investment choices exclusively in response to short-term market movements; instead, we recommend that investors work within an individualized financial framework to help ensure every decision is made in support of personal and financial goals.

Some investors attempt to improve their investment returns or avoid losses by timing markets, which is trying to correctly predict market highs and lows in order to buy and sell investments at a profit. Unfortunately, research shows that most investors are terrible at predicting market movements. A 2010 Morningstar study showed the average investor earned 1.5 percent less than the average investment during the volatile markets of the 2000s, largely because investors missed out on periods of high market gains by not being invested.

While it can be tempting to wait for the best time to invest — especially in uncertain market conditions — searching for the bottom of a market dip may mean missing out on periods of strong market performance, potentially costing you money over the long term. In reality, the top or bottom of a market is only visible in hindsight, meaning that most investors miss their moment. Rather than fretting about picking the right time to invest, consider instead how long you intend to keep your money in the market. Knowing your time horizon, or how long until you expect to need your money, is fundamental to choosing the right investments and investing strategy. Different investment types offer varying levels of risk and potential for return, and each may be suitable for a different time frame.

Investing requires discipline and the ability to make reasoned investment decisions. One of the major mistakes investors make is letting their emotions take over when making important financial decisions. It can be highly stressful to watch your life savings lose value when markets swing, and your instincts may urge you to make snap investment decisions. However, it’s critical to keep your feelings in check and avoid letting your emotions take over.

Determining your own investor personality and comfort level with risk is one of the best ways to stick to an investment strategy and avoid emotional decisionmaking. Investors who stray beyond their comfort level with risk may expose themselves to losses they cannot afford or panic and sell at the wrong time. Working with a financial professional provides a voice of reassurance and rationality when your emotions are high, which helps you avoid costly investing mistakes.

An important consideration in long-term investing is maintaining focus and consistency over time. There is no way to predict with any certainty which way markets will move in the future, which is why we sometimes recommend an approach known as dollar cost averaging. While it’s not suitable for all investors, dollar cost averaging may help smooth out market fluctuations by investing the same amount of money regularly over a period of time so you buy more of an investment when its price is low and less of that investment when its price is higher. While this approach cannot guarantee a profit or protect you against investment losses, it can help you avoid the guesswork and stress associated with trying to time the market.

Dollar cost averaging isn’t for everyone. In order to successfully lower your pershare cost over time, you must have the financial resources and investment discipline to consistently invest over time, even when markets decline. Before making any

SOURCES: “How the Average Investor’s Returns Compare with the Average Fund’s.” Morningstar Fund Research. http://news.morningst ar.com/PDFs/avginvret.pdf investment decision, it’s important to work with a financial professional to determine whether this might be an appropriate strategy for your goals and personal circumstances.

Our experience suggests that many investors can benefit from professional advice when developing goals and a financial plan. Many Americans are concerned about outliving their assets and maintaining a comfortable lifestyle through their retirement years. A financial professional can review your current financial situation and your future needs and work with you to develop a plan to help ensure that your savings last as long as you need them to. Volatility is one of the fundamental characteristics of today’s markets.

While no one likes to see their investments lose value, market volatility may offer investing opportunities and a financial professional can help you find those opportunities. While investing carries risk and market returns are never guaranteed, professional advisors can help you develop strategies to mitigate certain types of risk and may offer investment options suitable for different market environments.

DISCLOSURES:

Dollar cost averaging does not assure a profit and does not protect against a loss in a declining market. The strategy involves a continuous investment in securities regardless of fluctuating prices. Investors should consider their financial ability to continue purchases during periods of low price levels before beginning. Investing involves risk including loss of principal. No investment strategy can ensure profits or completely protect against losses in declining markets.

ROBERT AND THOMAS