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Lesko Financial: Stay Calm if You Have a Plan

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Bryanna: Stock market declines are causing jitters on wall street, and Greg Lesko of Lesko Financial says investors can stay calm if they have a plan.

Greg: It’s tough to keep emotions in check when you’re invested in the market and see the big dips stocks have taken lately. The best investing advice says don’t make decisions based solely on feelings and don’t react to the headlines of the day. Many investors who are able to put market swings into perspective are those with a “market panic plan” a three-step-strategy for how to face downturns and turn aside fear.

Bryanna: What would such a plan include?   

Greg: The first step is to review your goals and remember why you began investing in the first place. This helps return you to the long-term view you held when you first set out. Reasonable growth over a period of time was likely one motivation and your panic plan can reassure you that staying the course is the likeliest way to achieve that. The second step is to review the mix of investments you chose. Being well-diversified means that some of your investments won’t be tied to what the market is doing and that you aren’t exposed to too much risk.

Bryanna: What’s the third step in your plan to stay calm?   

Greg: Your “market panic plan” could also show you that depressed markets can be opportunities, that investing more of your cash during a downturn is often a winning strategy. Ideally, you should write this plan down and keep it where it will remind you to avoid over-reacting on days when wall street is looking like a wild carnival ride.