Finding Peace of Mind Amidst the Panic

It's hard not to see the fear - it's all around us with today's financial markets. Seems like only yesterday we were in the "Roaring 90s" with everyone expecting those 25-30% returns to continue (even though those numbers were so much higher than the historical 10-12%).

Fear can impel you to reach for a solution, something actionable to make the bad feelings go away. In the stock market, that often means selling everything immediately. But before you take such drastic action, read on for three more rational ways to handle your current financial situation. Ways more likely to bring you some peace of mind are:

1. Re-visit your willingness to withstand risk

As the markets go up and down, what is your long-term plan? It's very important that while you pay attention to the market, you are not controlled by it. Don't be like so many, who determine their level of risk by what they are currently experiencing in the market - taking risks when it goes up, and pulling out when it goes down. This is called 'chasing performance' and can often lead to disaster.

So make a plan and STICK WITH IT - unless your financial needs change.

2. Review your goals and make sure your portfolio matches your needs

We all do it. We listen to our friends and neighbors talk about what they are doing with their money and decide to follow suit. DON'T! What's right for them may not be right for you, no matter how good it sounds. Instead sit down with your advisors to review what you own. If you discover that you are not on track, don't be afraid to make any necessary changes in a down market.

3. Try to withdraw less from your portfolio

Remember our newsletter about "Outliving Your Money"? We advised you to withdraw only 3-5% of your portfolio, in order to make it last over time. The fact is, if you understand your spending levels, and keep the withdrawals to a minimum during rough times, you should be able to make it last!