Let Your Copilot Steer You Through Market Volatility With Confidence

August 17, 2020

During times of uncertainty, you may find yourself traveling down unfamiliar roads, forced to navigate new paths where one wrong turn could have significant consequences. This is particularly true as it relates to your financial journey.

Periods of market volatility and economic upheaval are a fact of life—and can be a cause for anxiety and stress. During times like these, when emotions are charged, people tend to make reactive decisions that might feel right at the time, but ultimately prove costly.

Let’s say you’re driving across a remote part of the interstate when you realize you are seriously low on fuel. The knee-jerk reaction might be to get off at the next exit and find a gas station. But there’s no guarantee a service station is anywhere near that offramp. You may end up wasting what gas you have left looking for a place to fuel up, only to find yourself back on the highway in a worse position than before, and with heightened anxiety.

In this scenario, you did not know what was nearby before pulling off. It seemed like the right move—but in reality, it was an uneducated decision. You didn’t have access to the right information to make the most informed decision. However, if you were traveling with a copilot—one who knew the terrain, the nearby gas stations, and alternate routes—your outcome would be much more promising.

Copilot = Experienced Financial Advisor 

The same concept applies when it comes to navigating your financial path. In the throes of the pandemic and the resulting financial crisis, many investors reactively pulled off the proverbial exit, only to realize after the fact that it was the wrong move.

The average investor tends to buy high and sell low. Consider this: according to research done by the financial research company Dalbar, in 2018, the S&P 500 was down 4.4 percent, but the average investor was down 9.4 percent. In fact, over a 30-year period, the average investor loses nearly 6 percent a year compared with the market’s return, says Dalbar.1 The truth is, many investors try to time their decisions to coincide with what the market is doing—a costly mistake, as the market tends to move up and down in short, unpredictable spurts.

During times of financial uncertainty, would you rather go it alone or navigate it with an experienced professional who has helped countless clients weather the volatility of the highs and lows—the bulls and bears—to achieve their financial goals? In the same vein, wouldn’t you rather travel with an experienced copilot who could tell you that pulling off at a particular exit would cost you what precious gas you had left?

Sure, you could rely on a robo-advisor or a do-it-yourself investment tool to guide your financial path. It’s easy enough, right? Just answer some automated questions about yourself and your financial goals, then get a one-size-fits-all portfolio of suggested assets to purchase. What you won’t get, however, is personalized guidance with deep insights that deliver customized solutions to address your unique situation.

Let’s go back to our road trip analogy for a moment. Think about your GPS: It may tell you that the Delta is the nearest station, but it won’t tell you that it charges 10 cents more than the also-nearby-but-not-quite-as-close Sunoco. A copilot would be able to share that critical information while also advising on which one makes the best freshly brewed coffee.

A trusted advisor offers the value of personal experience with the ability to devise or revise a plan specific to your unique financial needs and goals. Even if you make a wrong turn, an experienced advisor will steer you back on track.

You are the driver

As your trusted copilot, your financial advisor will guide you in a supporting capacity—but you are still the driver. He or she will simply present information about the opportunities, risks, and occasional volatility to help you make the decisions that will have the most significant impact on your future. Every choice is made by you—the star of your story.

What’s with all the analogies?

I love analogies; I find them to be useful tools to help make a point. After all, if I led off this article asking if you knew how to adjust the capital market assumption of your asset class in a bear market, would you have closed out the window before reading the first paragraph? Be honest.

We do not talk to hear ourselves speak. Rather, our goal is to speak your language as we help you navigate your savings, investments, and eventual retirement.

Let me ask you:

  • Do you know someone who continues to make nothing but left turns and needs a reliable copilot for their financial voyage?
  • Do you know someone with the potential to achieve their financial goals, but who could use a trusted copilot to guide them?

We invite you to share this article with them. After all, when it comes to retirement planning and keeping a level head in volatile markets, there is too much to lose to not spend 30 minutes with an expert advisor.

1. New York Post: Investors Are Losing Thousands Trying to ‘Time’ the Market. https://nypost.com/2019/05/04/investors-are-losing-thousands-trying-to-time-the-market/. Accessed July 27, 2020.