Agree Dwight…Experience really IS the best teacher

I was just going to share a clip from one of my favorite shows “The Office” then I heard Dwight say “Experience is the best teacher.” This phrase, when applied to investing, can be extremely valuable.

If you’ve been an investor in 2008, 2020 or 2022, you’ve seen how painful it can be to see your monthly statements take a hit. But how did you react? Did you sell and wonder about when (or if) you’ll get back in? Did you stick to your market downturn plan that you had in place before things got rocky? What mistakes did you make? It’s important to make note of your thoughts as well as your actions during market downturns so you can develop a solid plan for the next time we see the market bouncing around.

As a financial advisor – I use my experience to help clients with their emotions and actions during market downturns. I started my career in 2007 very close to the market peak at that point. GREAT TIMING! I spent the next two years talking to clients about their investment losses and conveying information that I received from my training at my firm. I did not have the experience of market downturns at that time – and relied on the info I was given from my mentors and others around me. It wasn’t easy starting a new career at that point.

Now that I’ve experienced a few market pullbacks, I’ve seen how patience can benefit those investors that don’t panic and give in to their emotions. So client conversations, with that experience behind me (and also a few “fire drills” along the way), have made the most recent market downturn a lot easier to deal with. Because clients were expecting something like this to happen at some point, many were able to take advantage of lower prices on investments they plan to hold for the long term. That was part of our investment strategy we put into place before the market got rough.

Next time you meet with your financial advisor – make sure you have talked about your investment strategy and how your actions during the recent pullback will affect your future plans. Don’t let the chaos (like in the video above) during the next bear market change your investment plan.

The opinions voiced in this material are for general information only. They are not intended to provide specific advice or recommendations for any individual, nor intended as tax advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.

LPL Tracking #1-05352153