Solutions 4 Financial Independence: 10/16/18

Published: Oct. 16, 2018 at 10:35 AM EDT
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Question (Fred from Mannington, WV): This week’s volatility in the market has me very scared. Should I move all of my money to cash before it gets worse or should I just hold on for the long run?

John Halterman (Beacon Wealth Management) Answer: Hey Fred, I get it man, cause this has been an extremely volatile week, and that volatility, creates a lot of emotion, and a lot of fear, but you know Fred, I'm not saying you shouldn't move money around, because I am a tactical money manager, and I don't believe in buy and hold, but I don't believe you should do something based on panic. The worst thing someone can do is do things on emotion, without any type of research, because what ends up happening is, people don't know why they're doing something. So, it's no different than buying something, you never want to chase something just because it's going up. You got to understand why it's going up, and why you own it, and the same thing with getting out of the market. What I say Fred, is look at what your objectives are, look at what your trying to do, your time frames, your risk tolerance, and everything like that, then go back and say ok, what kind of investor am I? Am I an asset allocator, where I'm providing the pot and just holding, or am I a tactical money manager where I move in and out of the market, but its research based. Well for most people, most people don't have the capability to be a tactical money manager, and even financial advisers don't have that capability. So, the thing is, keep the perspective of what you’re trying to do, and eliminate all the emotion you can, Fred.