financing the dream

Keeping Calm and Carry On Investing

Market volatility doesn’t have to cause fear

By Cameron Carr

IF ONE THING has been constant in the last couple years, it’s uncertainty. That may seem especially true for investors trying to anticipate the effects of an ever-evolving global pandemic and geopolitical turmoil on financial markets, but it doesn’t necessarily equate to poor investing conditions.

Though financial markets have fluctuated in recent times, an investor with a solid long-term strategy likely doesn’t need to worry. In many cases, the best advice is to keep calm and carry on.

“During times of uncertainty, the last thing you want to do is overreact,” says Vincent Finney, Managing Director - Investments for Bibler Finney Panfil Private Wealth Management Group of Wells Fargo Advisors.

What’s more, conditions may not be as uncertain as they seem. According to www.compoundadvisors.com, since the 1920s, the market has averaged a 13 percent pullback each year.

Pulling money out of investments during a downturn in the market can often lead to investors missing out on gains from some of the best days, which often follow the bad days, Finney says.

The best way to avoid this is to stick with an investment strategy. Historically, the stock market averages a return of about 10 percent, according to www.compoundadvisors.com. That average speaks to returns across time though, a given year may give a much different return.

The key is to distinguish what money is needed in the short term versus the long term. One way to approach it, says Ryan Bibler, Managing Director - Investments for Bibler Finney Panfil Private Wealth Management Group, is to keep money in separate buckets based on when it might be needed.

Bibler believes and recommends thinking of investments in three groups: • Short term – Money that may be needed in one to two years, often for purchases such as a new car or to cover a gap in employment. These assets should be easily liquified. • Intermediate term – Money that may be needed in two to five years, often for home down payments or supporting a child through college. Commonly held in bonds.

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Harvesting Losses

While pulling money out of investments during a drop in the market is generally not advisable, moving investments can have benefits. Drops in the market offer opportunities to harvest tax losses that can later be used against capital gains. An asset can be sold while at a loss, and the proceeds from that sale can be reinvested in a comparable asset.

“Those similar investments should recover,” says Joseph Panfil, Managing Director - Investments for Bibler Finney Panfil Private Wealth Management Group. “Now you’re giving yourself a tax loss that you can use against any gains in the future.”

While this is often done at the end of the calendar year, Panfil says there’s no need to wait if the opportunity presents itself earlier.

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Bringing Confidence to Your Investment Planning

At Bibler Finney Panfil Private Wealth Management Group of Wells Fargo Advisors, you will be working with a team of highly experienced advisors and diligent associates, all of whom serve successful businesses, high-net-worth individuals, and their loved ones. Our practice is built on the foundation of lasting, meaningful relationships, and we look forward to forming another such relationship with you. Our every decision is based on the following four words: Ethics • Respect • Honesty • Integrity

Contact us today to schedule an initial consultation with no cost or obligation. Call 614.825.4300 or visit bfppwmg.com 380 Polaris Parkway, Suite 250, Westerville, OH 43082

Investment and Insurance Products are:  • Not Insured by the FDIC or Any Federal Government Agency  • Not a Deposit or Other Obligation of, or Guaranteed by, the Bank or Any Bank Affiliate  • Subject to Investment Risks, Including Possible Loss of the Principal Amount Invested Wells Fargo Advisors is a trade name used by Wells Fargo Clearing Services, LLC., Member SIPC, a registered broker-dealer and non-bank affiliate of Wells Fargo & Company, CAR-0322-05238