With nearly 40 years of industry experience, there are several market drawdowns that stand out in my mind, each of them with their own characteristics. We’re hearing a lot about volatility today, and we often do when the S&P 500 dips. But it’s important to remember that volatility applies just as well to times when it’s up. After all, the definition of volatility is the tendency to change quickly and unpredictably. In short, volatility is our constant companion and inherent to an investment experience in a dynamic world. It’s with this understanding that Carlson Retirement Plan Services designs your retirement plan fund lineup optimized for volatility that swings in both directions—positive and negative.
Despite this, it’s easy to feel discouraged during times of less-than-favorable volatility headlines. Here are a couple of key points to keep in mind:
- It is important to consider the performance of market segments. And that the market segments you have available to you are designed to support your retirement goals. We provide you with options to create a disciplined investment strategy that accounts for volatility. Rebalancing the segments where you’re invested is one of the key tools available to accomplish this. As a result, a headline describing the market as “down” can be deceiving since it doesn’t necessarily represent your investment mix.
- We know the returns are there—it’s why we’re invested in equities in the first place. And, put simply, if your line isn’t in the water, you can’t catch the fish. Electing to exit the market on the account of poor timing automatically creates a second decision—when to get back in. It is our firm belief—one that is well researched and detailed here—that trying to time the market is futile. Rebalance and adjust for your risk—of course. But don’t depend on a strategy that times the markets.
We understand the many emotions that accompany the investment journey and we’re honored to walk alongside you through them all. We can assure you of three things: volatility is normal, the emotions you feel as a result of volatility are normal, with your partnership and candor, we know just what to do to help you navigate volatility and achieve your retirement goals. Thank you for the trust you place in Carlson Retirement Plan Services. We’re delighted to serve you.
This information was developed as a general guide to educate plan sponsors and is not intended as authoritative guidance or tax/legal advice. Each plan has unique requirements, and you should consult your attorney or tax advisor for guidance on your specific situation
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