Preparing for a Bear Attack

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Preparing for a Bear Attack
Has the recent market volatility thrown you off your financial game? Keep calm and focus on your long-term goals.

By Cody McAlester

It is commonly said that the best time to plant a tree is 20 years ago, but the second best time is now. The idea is not exclusive to horticulture. When managing your finances, planning for what's ahead is critical, especially so in times of market turbulence like that created by the coronavirus.

Creating and sticking to a plan will put you in the best position to accomplish your long-term goals, said Kim Bridges, senior vice president and director of Financial Planning at BOK Financial. Making emotionally charged decisions is the biggest threat to long-term planning.

"As part of our financial planning process, we stress test the plan for market volatility and what that does to the ability to meet long-term goals," said Bridges. "We typically “solve” a plan to achieve an 80% or better probability of success.”

Poor returns during bear markets are already factored into such a plan, she said, so market pullbacks are of lesser concern with a long time horizon.

While it’s natural to feel panic during short-term market declines, managing emotions and keeping the focus on your long-term goals is crucial, Bridges said. Market pullbacks are typically followed by rebounds with above-average returns, and remembering that in the middle of the storm could be the difference between "realized" and "unrealized" losses in your portfolio.

Bridges advises clients to recognize media sensationalism for what it is, turn off the TV if necessary, and rest assured that you are a long-term planner, not an emotional reactor.

"Emotions can cause us to make irrational decisions," said Bridges. "Take deep breaths, go for a walk, enjoy a hobby. Focusing on the volatility can cause you to react emotionally. Remember, this too shall pass."

While those with a plan can take comfort, what about those who don't have a plan in place? Bridges said there is no better time than now to start planning.

"Rather than worrying about what the market is doing day-by-day, focus on defining financial goals and determine if you are on a successful path to meet those goals," said Bridges.

You can learn more about BOK Financial’s financial planning services here.

 

The opinions expressed herein reflect the judgment of the author(s) at this date, are subject to change without notice, and are not a complete analysis of any sector, industry, or security. The content provided herein does not constitute advice or a recommendation or offer to sell or a solicitation to deal in any security or financial product. It is provided for information purposes only and on the understanding that the recipient has sufficient knowledge and experience to be able to understand and make their own evaluation of the proposals and services described herein, any risks associated therewith and any related legal, tax, accounting or other material considerations. Recipients should not rely on this material in making any future investment decision. To the extent that the reader has any questions regarding the applicability of any specific issue discussed above to their specific portfolio or situation, you are encouraged to consult with a qualified lawyer, accountant, or financial professional.
BOK Financial Corporation (BOKF) offers wealth management and trust services through various affiliate companies and non-bank subsidiaries including advisory services offered by BOKF, NA and its subsidiaries BOK Financial Asset Management, Inc. and Cavanal Hill Investment Management, Inc. each an SEC registered investment adviser. BOKF offers additional investment services and products through its subsidiary BOK Financial Securities, Inc., a broker/dealer, member FINRA/SIPC, and an SEC registered investment adviser and BOK Financial Private Wealth, Inc., also an SEC registered investment adviser.

Investments and insurance are not insured by the FDIC; are not deposits or other obligations of, and are not guaranteed by, any bank or bank affiliate. All investments are subject to risks, including possible loss of principal. The content on this website is for informational and educational purposes only and does not constitute legal, tax or investment advice. Always consult with a qualified financial professional, accountant or lawyer for legal, tax and investment advice. NOT FDIC INSURED | NO BANK GUARANTEE | MAY LOSE VALUE

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BOK Financial Corporation (BOKF) offers wealth management and trust services through various affiliate companies and non-bank subsidiaries including advisory services offered by BOKF, NA and its subsidiaries BOK Financial Asset Management, Inc. and Cavanal Hill Investment Management, Inc. each an SEC registered investment adviser. BOKF offers additional investment services and products through its subsidiary BOK Financial Securities, Inc., a broker/dealer, member FINRA/SIPC, and an SEC registered investment adviser and BOK Financial Private Wealth, Inc., also an SEC registered investment adviser.

Check the background of this firm on: FINRA's BrokerCheck

Investments and insurance are not insured by the FDIC; are not deposits or other obligations of, and are not guaranteed by, any bank or bank affiliate. All investments are subject to risks, including possible loss of principal. The content on this website is for informational and educational purposes only and does not constitute legal, tax or investment advice. Always consult with a qualified financial professional, accountant or lawyer for legal, tax and investment advice. NOT FDIC INSURED | NO BANK GUARANTEE | MAY LOSE VALUE

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