Navigating Market Volatility
The recent ups and downs in the stock market may have left many investors feeling uneasy. But for those with a long-term plan and a well-structured portfolio, short-term volatility doesn’t have to derail their progress.
At CGN Advisors, we guide our clients through market changes with steady, research-driven strategies and a focus on long-term outcomes. Our disciplined approach to financial planning and investment management is built to support clients and their families through every market cycle.
Take a moment to watch this quick video to learn how CGN helps clients stay grounded, confident, and focused on what matters most.
Transcript
Hello, I'm Chad Chase, Managing Partner and Senior Advisor at CGN Advisors in Manhattan, Kansas. Today, I'd like to explain how we, as CGN Advisors, help our clients navigate the inevitable volatility that comes with investing.
How to Think About Market Declines
If you've been paying attention lately, you've probably noticed recent ups and downs in the stock market. As an investor, you may be asking yourself, what do these declines mean for me and my future? Should I be doing something differently? For most investors, we believe the answer should be no. If you have a strong, disciplined investment approach in place, market fluctuations are already anticipated and accounted for.
Let me discuss how we approach market volatility at CGN Advisors, and how I consider volatility in my own personal investments as well.
Building Portfolios for the Long Term
A carefully designed and diversified portfolio isn't built for what's happening today, tomorrow, or next month. It's built to withstand the ups and downs of the market and endure for the long run.
The portfolios we construct for clients include a mix of investments and asset classes like stocks, bonds, and cash that play separate and distinct roles within a portfolio.
The Role of Stocks, Bonds, and Cash
As an example, stocks may provide the potential for growth, bonds produce income and serve as a cushion during downturns, and cash provides stable value and liquidity. My own personal investment accounts are built the same way as our clients, using the same philosophy and following the same principles.
Market downturns can be uncomfortable for anyone, but for those who stick to a long-term outlook, declines may provide opportunities to enhance overall results.
Finding Opportunity During Market Pullbacks
When pullbacks occur, professional investment managers, including our team, scrutinize market data to unearth potential buying opportunities for our clients at lower prices. You may not know it, but if you contribute regularly to your 401 (k) or other employer-sponsored retirement plan, your contributions may also be buying shares of your selected investments at a discount during the market downturns.
Using this approach, we take advantage of lower purchase prices that may translate to better investment returns over time as markets recover. So in short, we make market volatility our friend, not our enemy.
The Importance of an Emergency Fund
Now, why is having an emergency fund so important? A key element of a good financial plan is having enough liquid cash readily available for short-term needs.
In my own household, we keep an emergency cash account handy, so if the car breaks down or some other financial emergency arises, we don't have to touch our long-term investments or run up our credit card balance to cover the cost. This is a financial principle we always emphasize with our clients.
Investing is for long-term objectives. Your emergency fund keeps you financially stable without having to sell your investments at the wrong time. By adhering to this strategy, market volatility may have less of an impact on your day-to-day financial well-being.
Staying Invested During Market Swings
Once again, time in the market, not time in the market, is the key to long-term investing success. We often remind clients that the worst days in the market are often followed by the best days. If you jump out during the bad days, you may very well miss out on the recovery days, waiting for some indication that things are getting better.
How CGN Advisors Approaches Long-Term Investing
At CGN Advisors, we focus on structured, strategic, long-term investing methods that strive to keep your financial plan on track.
Market volatility is an inherent part of investing in the financial markets, there's just no way to avoid it.
The question to ask yourself is, do I have a plan and a strategy to navigate my way through these periods and stay the course?
Unsure about your own strategy? Or would you like a second opinion? We're here to help. Call our Manhattan, Kansas office at 785-340-3434 or our Rogers, Arkansas office at 479-335-1034.