Happy New Year! Not sure what happened to January, but here we are. Hope everyone is staying warm during the cold snap we’re having on the East Coast and staying safe during this COVID surge.
As we start this year, the collective financial attention has shifted to the markets: specifically the stock market. At Brooklyn Plans, we prepare for annual investment reviews starting next month and are running reports and summarizing the state of markets from 2021 to succinctly explain to our investment management clients. We are doing this against the backdrop of recent market volatility, which we haven’t seen much of for some time now. This is normal, expected and completely unsurprising given the enormous runup we have seen in markets over the last decade and in particular the last few years. It’s also to be expected that it stirs up concerns for people invested in the markets whether through an investment account, an IRA or a 401(k).
Ignore the noise you’ll hear in the news about markets reaching lows unseen in 6 months. 6 months is nothing. A year is nothing in the market life cycle. When we guide our clients’ investments, we take a strategic approach with a longview in mind and we don’t invest aggressively for shorter timeframes. We invest in line with our clients’ goals and the timeframe for those goals. The first goal of investing should be to not lose money for the timeframe it’s needed. It is not, contrary to popular belief, to take as much risk as needed in order to grow the funds as much as possible.
At Brooklyn Plans, we take an evidence-based, strategic approach to investing and ignore the noise from the financial press. If you do the same, you won’t feel anxious about markets being down. And you’ll find comfort in knowing that over time, the growth of invested assets when invested strategically and appropriately, will exceed the temporary losses markets regularly face.