Keep Calm and Read On: How to Handle Bumpy Markets
When domestic and global markets undergo a sharp downturn, what should you do? Regardless of your age, investing acumen or account size, these tips may help you weather the storm.
By Rich Guerrini, president and CEO of PNC Investments
If you believe what pundits are saying about the recent market volatility, you’d understandably think the sky is falling. It’s normal to feel rattled when you see a lot of red. After all, your financial future may be on the line.
That being said, I want to reassure you that what the markets have been doing is not only expected, but normal. As a long-term investor, you will experience both bull markets – periods of strong market returns – as well as bear markets – periods of disappointing, usually negative, returns.
Corrections – defined as a negative return of at least 10 percent – are both common and healthy for equity markets. Any sound financial plan should account for market volatility and should be designed to focus on long-term goals and be positioned to help weather volatile markets.
Regardless of whether you’re on the cusp of retirement or just starting out, here are some tips to help you weather market downturns.
- Don’t panic. When it seems like the sky is falling, the natural reaction is to panic. It’s certainly easier said than done, but do your best to remain calm and remember that corrections and market downturns are normal and healthy.
Panic can lead to rash decisions that can derail your long-term investing goals. As an investor, you never want to make decisions based on emotions – especially fear – so first and foremost, try to remain calm.
- Schedule a portfolio check-up. Chances are, you schedule regular check-ups with a doctor, even if you’re not sick. Treat your portfolio the same way.
Contact your financial advisor for a financial check-up. Instead of checking your blood pressure, your advisor will check your asset allocation – what stocks, bonds and assets you are invested in – and help you determine how the rocky markets are affecting your financial health.
- Remember your long-term goals. It sounds counterintuitive, but a rocky market environment may be the perfect time to revisit your progress toward those goals.
During your review with your financial advisor, he or she will take a closer look at the progress you’ve made toward achieving your goals and help confirm if any adjustments are necessary.
- Don’t try to time the markets. It’s a natural instinct to want to buy assets that are doing well and similarly to want to reduce your exposure to assets that are declining.
Resist the urge to participate in market timing, which is defined as trying to exit and enter a certain investment position. Market timing is virtually impossible to execute because you need to determine the exact moments to enter and exit the market.
While your gut instinct might be to sell certain positions while the markets are going haywire, try to take a deep breath before making any rash decisions.
Of course, everyone’s situation is unique, but these tips can serve you well during any and all periods of market volatility, including what we are experiencing now.
Rich Guerrini is president and CEO of PNC Investments
Learn more about PNC Investments »
Rich Guerrini is president & CEO of PNC Investments
PNC Point of View
Real People. Real Perspective. Real Insights.
Read more POV Stories »
Important Legal Disclosures & Information
These articles are for general information purposes only and are not intended to provide legal, tax, accounting or financial advice. PNC urges its customers to do independent research and to consult with financial and legal professionals before making any financial decisions.
This site may provide reference to Internet sites as a convenience to our readers. While PNC endeavors to provide resources that are reputable and safe, we cannot be held responsible for the information, products or services obtained on such sites and will not be liable for any damages arising from your access to such sites. The content, accuracy, opinions expressed and links provided by these resources are not investigated, verified, monitored or endorsed by PNC.
Important Investor Information: Brokerage and insurance products are:
Not FDIC Insured • Not Bank Guaranteed • Not A Deposit
Not Insured By Any Federal Government Agency • May Lose Value
Securities products, brokerage services and managed account advisory services are offered by PNC Investments LLC, a registered broker-dealer and a registered investment adviser and member FINRA, and SIPC. Annuities and other insurance products are offered through PNC Insurance Services, LLC, a licensed insurance agency.
PNC Investments and PNC Insurance Services do not provide legal, tax or accounting advice.
The PNC Financial Services Group, Inc. (“PNC”) uses the marketing name PNC Wealth Management® to provide investment and wealth management, fiduciary services, FDIC-insured banking products and services, and lending of funds through its subsidiary, PNC Bank, National Association (“PNC Bank”), which is a Member FDIC, and to provide specific fiduciary and agency services through its subsidiary, PNC Delaware Trust Company or PNC Ohio Trust Company. Securities products, brokerage services, and managed account advisory services are offered by PNC Investments LLC, a registered broker-dealer and a registered investment adviser and member of FINRA and SIPC. Insurance products may be provided through PNC Insurance Services, LLC, a licensed insurance agency affiliate of PNC, or through licensed insurance agencies that are not affiliated with PNC; in either case a licensed insurance affiliate may receive compensation if you choose to purchase insurance through these programs. A decision to purchase insurance will not affect the cost or availability of other products or services from PNC or its affiliates. PNC does not provide legal, tax, or accounting advice unless, with respect to tax advice, PNC Bank has entered into a written tax services agreement. PNC does not provide services in any jurisdiction in which it is not authorized to conduct business. PNC Bank is not registered as a municipal advisor under the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Act”). Investment management and related products and services provided to a “municipal entity” or “obligated person” regarding “proceeds of municipal securities” (as such terms are defined in the Act) will be provided by PNC Capital Advisors, LLC, a wholly-owned subsidiary of PNC Bank and SEC registered investment adviser.
“PNC Wealth Management” is a registered trademark of The PNC Financial Services Group, Inc.
Bank deposit products and services provided by PNC Bank, National Association. Member FDIC.
©2018 The PNC Financial Services Group, Inc. All rights reserved.