By Kyle Louvar, CFP®, AIF®
Has the state of the world and the ever-changing stock market got your head spinning? While there may be a lot of uncertainty right now, one thing we can count on in life is the constancy of change. But as much as we dislike change, the stock market likes it even less.
Recession fears have caused investors to purge their stocks, resulting in an overall downward trend this year. As of June 6, the Nasdaq and S&P 500 are on an 8-week losing streak, with brief gains in the past week. (1) Even some of the major players have seen declines, with Apple losing 16.9% so far this year and Amazon losing nearly all of the gains it saw during the pandemic. (2,3) As a result, many economic leaders are predicting a recession in our near future. (4)
All of this may seem unsettling, but rest assured we’re here to help walk you through whatever happens. Here’s how we are watching over your finances and taking proactive steps to help secure your wealth.
We don’t make investment decisions based on what everyone else is doing or what’s popular in the investment industry. Whenever we make planning decisions with you and offer investment recommendations, we do it with your goals in mind. When the markets get shaky, we go the extra step of reviewing your objectives to make sure you’re still on track and make educated decisions that are not based on panic or emotion.
This starts from the very beginning of our relationship with you. We use conservative return numbers when analyzing the potential outcomes of your plan because we know that corrections and bear markets will happen. We also use asset allocation “buckets” that divide your wealth into short, intermediate, and long-term strategies to help you make the most of a volatile market.
We Know Your Risk Tolerance
Do you know that feeling in the pit of your stomach when you make a decision that was too risky for your comfort? Our goal is to help you avoid that feeling when it comes to your investments.
Before investing any of your money, we determine your risk tolerance. And, like most things in life, your risk tolerance may change with age, income, and financial goals. We don’t want you to lose sleep at night, so we review your risk tolerance and how much risk you can afford to take and adjust your investments over time.
Beyond Basic Diversification
We’ve all heard about the importance of diversification when it comes to maximizing our investments. Diversification should involve more than just maintaining a balance between stocks and bonds, especially when traditional investments are volatile.
There are many alternative investments, but some of the most common ones are real estate, private equity, commodities and precious metals (either directly or as an underlying asset in an exchange-traded fund). In general, an alternative investment behaves differently from stocks and bonds, which adds value to your portfolio by acting as a diversifier. We can help you add alternative investments to your portfolio, spreading out your risk even further.
We live in a society where information is at our fingertips in an instant. But that doesn’t always mean that the information is accurate or correct. Oftentimes, opinions are written without any supporting factual information, so it’s important to understand if there are any underlying motives to the “information.” For example, the solution in an article titled “Market Crash On the Horizon” could be “buy our fund now.” In this instance, the underlying motive is that the company wants you to buy its fund so it can grow its revenue. This “information” is not necessarily in your best interest.
During times of volatility, it’s important to focus on data from reliable sources and take the emotion out of your decision making. Economic and market data can help you determine if it is diligent to take some risk off. It can also help you determine if it’s appropriate to put new money to work and put some risk on. Following reliable sources is one of the many tools we utilize to keep our clients informed, educated, and help them make decisions that are in their best interests.
We Are Your Emotional Support System
It’s important to stay level-headed and not get too emotional when making investment decisions. Of course, this is easier said than done. We focus on the financial planning to help you stay on track and avoid making decisions when emotions are running high. The markets will rise and fall, but your financial plan can stay steady if you work with a trusted advisor who will consistently monitor your investments and help you prepare a solid long-term strategy.
If you don’t have someone you can turn to for support, we’d love to help you build your finances for a strong future. Schedule a FIT meeting using our online calendar or contact us at (832) 975-0711 or email@example.com to learn if we are the right team to guide you on your financial journey.
Kyle Louvar is the CEO and Wealth Management Advisor for Guided Capital Wealth Management, a fiduciary financial advisory firm offering fee-based advice, guidance, and education. After seeing the impact that the 2008 financial crisis had on families, Kyle became fully committed to helping his clients develop a financial plan that changes as their lives unfold and their needs evolve. Spending nine years working for one of the largest brokerage firms on Wall Street, Kyle holds a high value for process, expertise, objective advice, and customized solutions. His goal is to help his clients experience confidence in their financial future through a disciplined process of financial planning, investment management, and sound financial decision-making.
Kyle graduated from New Mexico State University, where he was a proud 4-year letterman in football for the Aggies and where he’s sat as an NMSU Foundation board member since 2015. Kyle holds the CERTIFIED FINANCIAL PLANNER™ and Accredited Investment Fiduciary® certifications. When not helping his clients, Kyle enjoys spending time with his wife, Nicole, and their two daughters. You can often find him coaching his daughters’ softball teams, playing golf, cooking, and traveling. To learn more about Kyle, connect with him on LinkedIn.