Financial advisors say ‘Don’t panic’ during market volatility

People are concerned about the current economic status in the U.S. and many are going into crisis mode to insure that they don’t sink into the economic downfall, but things might not be as bad as they seem. Courtney Kern is a financial advisor for Edward Jones in Medford, and she believes that the economy is simply slowing down, not crashing.

“The rate that we were going at before was not sustainable,” Kern said when discussing the fear that some of her clients had about our current economy. She believes that the slow down of the economy is not a bad thing and does not mean we are heading towards a recession. Staying at an unsustainable rate is how the economy crashes, not slowing down. So no, you should not be liquidating your 401Ks, sticking your hands into your retirement savings, or burying money in your backyard.

Many people might want to update their financial plans, but Kern says that as long as you are proactive and have a good portfolio, even making minor changes to your plan is unnecessary. If you haven’t reviewed your plan for a long period of time, it is a good idea to do so and set new goals that fit your current financial situation, but you don’t need to be adjusting your plans as a reaction to the current economy.

INVESTING

“The reality is that this is the best time to be investing. Because I always tell people we want to buy low and sell high,” Kern responded when talking about whether or not people should be investing given the recent drop in the stock market. Kern explained that most investors are worried about their stocks right now because of the uncertainty in the market, but still believes that now is a great time to be investing. She compared the drop to a Black Friday deal that no one wants to take advantage of because of the high emotions involved. The stock market will always fluctuate and the risk will always be there but people should be taking the opportunity to invest when stocks are low. When giving advice for new investors, Kern’s first suggestion is to find a fi nancial advisor you can trust and rely on. If you feel like you’re not on the same page as your advisor or you don’t trust their advice, you should find someone you are compatible with and whose advice you can rely on. Another tip she suggested was to set up a plan and have an end goal. She also believes it is important to establish your comfort level with risk in the stock market. Your advisor needs to know what type of investments you are willing to make.

When becoming a part of the investing world, Kern also believes that you should have diversification when it comes to your investments. While having your stock in one company does pay out when the company is doing well, you may have nothing else to lean back on when it’s not.

EMPLOYMENT

“The issue isn’t necessarily that people don’t want to work, the issue is that we don’t have enough people. Period, end of story ,” Kern commented when we were discussing the current employment rates in the U.S. Kern talked about how recent generations did not have as many kids as past generations and this is causing a worker shortage. Many believe that this shortage is due to laziness, but Kern believes it’s because there are not enough people who are of the working age.

Many people are now familiar with the “We’re hiring!” signs up in almost every business’s window. And while this may seem concerning to most people, Kern believes it is a good sign for the state of the economy. Kern explained that unemployment is at an all time low right now and the fact that companies are still looking for employees is a good thing. People should only be concerned about employment rates when those signs start getting taken down.

FINANCIAL ADVICE

“The people that I see struggle the most are the ones that have no plan from the get go,” Kern replied when talking about advice on how to maintain a good financial situation. One suggestion she had was to create a financial plan and work with a financial advisor you can trust. While some people prefer to handle their finances by themselves, having an expert on your side will only benefit you in the long run.

Learning how to save is also important when maintaining a good financial status. In order to save money, Kern suggests that you should be living within your means and putting money into some sort of savings account. Be sure to at least have an emergency account that you can fall back on during a crisis.

“Treat it like a bill.” This was Kern’s advice for people who struggle with saving money. If you give yourself an obligation to put in money into a savings account it will make a difference to your financial situation and help you reach your savings goals.