FINANCIAL CONCEPTS BLOG

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Return of Volatility? At Financial Concepts, we never knew it left!

One of the most frustrating headlines to read is that the market was volatile today or it’s turbulent again. Again? When wasn’t it? Both the biases that up is normal, and down is volatile or bad are wrong.

 Webster’s defines volatility as the tendency to change quickly and unpredictably. CHANGE. UNPREDICTABLY. Notice that…change without specifying direction. And the most important adjective we stress is unpredictably. No matter how many brilliant talking heads tell us they can predict when and which direction, they can’t. No one can. Even the person that was right, once or twice before.  Remember a broken watch is right twice a day!

 We like words that describe with vivid pictures. We often tell people if you watch the market minute by minute, or day by day, or even month by month, it can look like a squiggly EKG. But if you look at heart rates over time, you will see a very steady line. None of us wants to look at our EKG daily, now, do we?

  Volatility, both up and down, is why the “stock market” provides the returns we need. Comfortable retirement requires growing income that we can’t outlive, and we can’t receive that from an investment that is fixed. Instead of the “stock market” we remind you to think of owning great businesses.

  Remember your plan and goals matter most. If our goal is to teach our children to take their toys upstairs…we should focus on that toy at the top of the stairs. What if that toy is a yo-yo? If we watch our grandson, playing with that yo-yo on each step, the ups and downs might drive us crazy. But if we keep watching, we will see him eventually get upstairs…the trend of that yo-yo, while up and down on the way, was up the stairs! And after a few minutes, the boy and his yo-yo are at the desired top step!

 And the ups and downs that happen on each step, or each day, month, or year, on the way to a lifetime retirement income, are just that, the steps on the way to the ultimate goal…the top step, or the lake house, or the garden, or the front porch swing with grandchildren.

 

Sometimes Grandmothers Do Know Best
Plan Today for Happier Tomorrows
 

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Financial Concepts is a registered investment adviser located in Columbus, MS. Financial Concepts may only transact business in those states or countries in which it is registered, or qualifies for an exemption or exclusion from registration requirements. For non-clients of the firm, Financial Concepts’ web site is limited to the dissemination of general information pertaining to its investment advisory services.
 

Please contact Financial Concepts at 662-327-1480 to find out if we may conduct advisory business in the state or country where you reside. Accordingly, Financial Concepts does not, and will not, effect or attempt to effect transactions in securities, or the rendering of personalized investment advice for compensation, through this website. Any subsequent, direct communication with a prospective client shall be conducted by a Financial Concepts representative who is either registered or qualifies for an exemption or exclusion from registration in the state or country where the prospective client resides.