Tuesday, June 18, 2019
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Wealth Tips

May 2019 be a Prosperous One

Like a roller coaster, markets have no engine to guide them along a track. Instead, earnings and other factors create momentum. Momentum creates potential energy like the tick, tick sound as you rise to the top of the hill – eventually reaching its peak and creating kinetic energy – like volatility thrashing the market up and down. Unlike roller coasters, over time, markets have historically risen and don’t just end up in the same place. That is, unless you get off. Certainly no one would advise you to get off while the ride is in motion. Instead, we are reminded to be patient. Maybe this roller coaster isn’t for you. Maybe you need a slower gentler one. Maybe it’s just right. It is important to have an investment policy statement (IPS) that helps guide your investments and your advisors. Revisit your IPS regularly.

Market volatility creates opportunities and a chance to review your process, policies and advisors.

  • Take advantage of tax-loss harvesting.
  • Review your positions and make sure you have a sell discipline in place.
  • Review your asset allocation and consider rebalancing.
  • Revisit quality names that were too expensive and may now be a better value.
  • Be aware of the 30-day wash sale rule.

It is important to understand that volatility is good. It’s healthy. It is also important to implement risk management techniques. For example, have a buy AND sell discipline. Don’t just ride a stock down, don’t fall in love with a company, brand or celebrity CEO, don’t speculate and buy something because everyone else is (Pot, Bitcoin, etc.) unless you have good analytical reasons to do so.

Remaining invested means participating in the recovery as soon as it happens rather than missing the first leg which is many times the strongest.

In the meantime, consider the current volatility the norm. Risk will only increase as the bull market matures, so it is likely that 2019 will be more of the same. The next few years will possibly be tougher than the last. Whether you do-it-yourself or have an advisor, it is important to consider how you faired during the recent market turmoil and what if anything needs to change.

From all of us at WealthEngage – Happy Holidays and a Happy New Year, may 2019 be a prosperous one.


Opinions expressed in the attached article are those of the author and are not necessarily those of Raymond James. All opinions are as of this date and are subject to change without notice. Securities offered through Raymond James Financial Services, Inc. member FINRA/SIPC. WealthEngage is not a registered broker/dealer and is independent of Raymond James Financial Services. Investment Advisory Services offered through Raymond James Financial Services Advisors, Inc.

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