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  • Doug Oosterhart, CFP®

Dow Down 800 Points, What's Your Next Move?

I recently heard from a client, "If I feel like selling after a down market, I go to the gym instead so the benefit is two-fold."

If you saw the news yesterday, you're probably like many people that may be currently recovering from the damage of news headlines touting, "Dow PLUNGES More Than 800 Points." It's understandable. Media sources screaming that the market is plunging is nerve-wracking. Don't go running for your bomb shelter quite yet.

Investing is a long-term game. Even for those on the cusp of retirement, we are still planning for the next 20 or more years. The key word being the word *planning*. Markets go up and down. There is risk involved. A big key with our clients is setting the expectations up front. It's the advisors job to help the client understand that they don't work with an adivsor so that they can beat the market. Since it's known that the market will go up and down but not known WHEN, the key is to prepare and have a plan for these downturns and risk. A plan helps seeing the media saying, "Dow Plunges...", not hurt as much.

When an advisor has educated their clients correctly (one intangible benefit of working with a fiduciary financial planner), the client understands that downturns are normal. In fact, a short email thread with a client yesterday afternoon was:

Me: "XXX stock was down X% percent today - would you like to add to your position?"

Client (less than 5 minutes later): "Yes, lets add $XX,XXX. I'll call you in a few minutes to confirm."

Education and setting expectations are keys to financial success. The client in that conversation totally understands that buying solid companies when they're on sale makes the most sense. We are not timing the market, but we are not totally naive either.

Instead of using the Standard & Poor's 500 index as the only way to measure financial success, develop a plan/strategy and stick with it. Using Standard & Poor's 500 as the exclusive measure for success is often a poor standard.

Instead, have a plan that you are comfortable with that plans for more than retirement. If you don't have a written plan or you're not comfortable with it, it's time to develop one.

Our goal for clients in retirement is that they have enough purpose to get up in the morning and enough money to sleep at night.

Don't let an emotional decision destroy your entire portfolio. Timing the market is nearly impossible. What is possible is making sure that you're well prepared for all types of market conditions and life transitions.

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