Here are seven deadly sins to avoid as markets pirouette uncontrollably.
- Panic. If you panic and sell your stocks, you could permanently damage your long-term financial goals.
- Financial Plan. A financial plan provides benchmarks, goals, and targets to keep you focused on your future. If you don’t have one, you invest blindly and rely on luck.
- Cash Balance. A large cash balance provides comfort as stocks fall, but it’s a long-term drag on performance and loses its value to inflation over time.
- Rebalancing. Rebalancing reduces risk. If you don’t rebalance your account during market corrections, it may be too conservative when the recovery comes.
- Recovery. The stock market has always recovered. It may take days, weeks, months, or years to recover, but it always has rebounded. If you liquidate your portfolio, you may miss a powerful bounce.
- Spending and Savings. If you spend too much and save too little, you could impair your financial future. Spending and saving are the only things you can control; everything else is beyond your reach.
- Lack of Faith. I know God is in control, I believe in America, and I trust free markets. Faith is paramount.
For our light and momentary troubles are achieving for us an eternal glory that far outweighs them all. So we fix our eyes not on what is seen, but on what is unseen, since what is seen is temporary, but what is unseen is eternal. ~ 2 Corinthians 4:17-18
October 13, 2022
Bill Parrott, CFP®, is the President and CEO of Parrott Wealth Management in Austin, Texas. Parrott Wealth Management is a fee-only, fiduciary, registered investment advisor firm. Our goal is to remove complexity, confusion, and worry from the investment and financial planning process so our clients can pursue a life of purpose. Our firm does not have an asset or fee minimum, and we work with anybody who needs financial help regardless of age, income, or asset level. PWM’s custodian is TD Ameritrade, and our annual fee starts at .5% of your assets and drops depending on the level of your assets.
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