In this week’s episode, I talk about market volatility, financial planning, and retirement planning. This is a high-level overview to help you and give you some information to help you in your financial life.

Don't forget to like and subscribe to my channel for the latest information and updates. I certainly appreciate that. And with that, we're going to dive right in. Handling market volatility.

Conventional wisdom says what goes up must come down. But even if you view market volatility as a normal occurrence, it doesn't feel good. I mean, that's the bottom line. That doesn't feel good when the market goes down.

We know it certainly doesn't go up in a straight line, and it seems like as of late it's gone down in a straight line, but we know that markets can correct. So how do you combat it? I think that's a great question. You know, the number one thing you do is make sure your portfolio has diversified.

You know, don't put all your eggs in one basket. This year, probably more than many years past, we've seen just about everything go down. So even a well-diversified portfolio has gone down in the market. And once again, it doesn't feel good.

You think you're doing everything that you can do, and your portfolio still goes down. So you know, sometimes that's just the way things work. But if you're invested for the long term, you know, you don't really worry about the day-to-day, three months, six months. As an investor, your outlook's going to be three to five years, not six months or one year.

It doesn't make it feel any better, though. That's for sure. You know, you want to make sure that you look before you leap. You may be tempted to pull out of the stock market altogether and look for less volatile investments.

And you know, sometimes those aggressive investments that you had that have gone down, and you put them into something that's less aggressive, they are not going to rebound the way that you think that they will. They're not meant to move the way that those more aggressive investments move. In particular, bonds, bond portfolios right now, the ETFs, a lot of them are down 10%, which once again, it just kind of goes back to, you know, everything's really gone down. But they're not going to move like a large cap growth fund.

You know, that's certainly going to move, and they're down 15%, 20%, a lot of them. But they're certainly going to move faster when the market rebounds. So if you were to move from that large cap growth fund into a bond portfolio, yes, if the market continues to slide, they're going to slide less. That is for sure.

But that is a short-term fix to what should be, you know, a long-term investment portfolio. You know, you have to look at, there's a silver lining in every cloud, and that is that, you know, as the markets decline, you know, hopefully your portfolio or a portfolio that you're thinking of is going to dollar cost average into that portfolio. You know, we've heard it before about dividend-paying stocks, you know, as that market continues to stay idle, as it's done this week since the big slide, you know, and generally a lot of times after a big drop like that, you know, the market will stay idle. Well, that portfolio shouldn't stay idle.

It should be dollar cost averaging into that portfolio, and if your money's already all invested in the portfolio, well, you can rely on dividends to reinvest for you. So that's certainly a strategy by dollar cost averaging. Just checking out some of my notes here. Don't stick your head in the sand while focusing too much on short-term gains or losses.

It's just not smart. You know, the short-term, unless you're a trader, which more than likely you're not listening to this podcast and you're an investor, you know, really it's don't get caught up on short-term volatility, and every analyst has come out and said that, you know, going into the end of the year, there's going to be a lot more volatility. November we have the elections coming up, and that's certainly going to raise a lot of volatility around the elections. I always, you know, like to joke that you can only bet on the end of the world once and be right, because it's the end of the world, and if you think it's the end of the world, then you should bet it that way, but if it's not, then you really want to take a deep dive into your portfolio.

A great time to do it is certainly when the markets are down. You can investigate, you know, what is working, what isn't working. You know, maybe some of those conservative funds or ETFs that you're in, maybe they've slid a lot further than they should have, and, you know, your risk portfolio is a lot riskier than you thought it might have been. You know, but market volatility is never easy.

It feels good to the upside and feels horrible to the downside, but generally it's short-term, you know, for the most part, and, you know, really, you know, you need to reach out to your financial advisor or whomever it is that you work with inside your portfolio and discuss what is going on inside your portfolio. There are some times, you know, you really want to make a change just because you can't take it anymore. Some of you may have heard the word capitulation. Well, capitulation happens when basically everyone says, I can't take it anymore, there's too much pain, I've got to get out, and those are when you see those really big drops in the market, and a lot of times that's capitulation, and this year, some people feel we haven't had that capitulation point.

You know, listen, the market's been good for the last few years. Pretty much you threw money at anything and it made money. Well, that's not the case this year, as most of you know, and it's been difficult, you know, I'm not going to lie. It's been, you know, a challenging year to make money, and, you know, a lot of times it's not always about making money.

It's about protecting what you have. You know, depending on where you are in life, you know, if you're younger, it's more about growth than protection, so you're looking at opportunities, and then as you get older and you start to get more towards that retirement age, it's about protecting what you have and also growth, but you're just not going to take as much risk inside that portfolio because your time horizon is less, and the time horizon aspect is something for another episode. You know, I've made a video on that on YouTube that you can check out, you know, what is your time horizon, and really, you know, it goes back to that comfortability. I've talked about this at length, you know, saying that, you know, when you can put your head down on your pillow and feel comfortable, even in a 1,000-point Dow decline, and say, you know, I'm okay, my portfolio's all right, you know, your risk is where it should be, but if you're freaking out, feel like you want to sell everything, you know, your risk is probably too high, and, you know, you really should talk with your advisor or call me, and we can talk about it, and, you know, look at that portfolio, make a decision, make some decisions, and really just not react for the sake of reacting, but really just kind of do your homework, analyze what you have, and, you know, see where, you know, things are headed, where you think things are headed, you know, if you put 20 financial advisors in a room, you're probably going to get 20 different answers.

That's just the way that it is. So financial planning, helping you see that big picture. The process can actually involve a few, a number of professionals to get that done. They can be financial planners like myself, accountants, tax attorneys, estate planning attorneys, investment advisors.

The most important member of the team, however, is you. All decisions lie in your hands. That's a fact. Why can't I do it myself?

You can, if you have enough time and knowledge. I mentioned that last week, that if you have the time and the knowledge and experience, you know, you can do it all yourself. Although I'd like to think that, you know, having someone accountable, making yourself accountable to what you do, you know, makes a difference and an impact. I've always liked to say that, you know, the best basketball player in the world, Michael Jordan, some of you may argue, but even he needed a coach, Phil Jackson.

And so even the best players in the world still reach out to their coaches and have to have coaches. Is the financial planning process complicated? Well, it can be, depending on the size of the portfolio. Generally, the more money that's involved, the more complicated it can be.

You'll have businesses, taxes, tax laws, and that's where tax attorneys come into play, estate planning attorneys, you know, depending on how you want to transfer your assets in your estate, you know, and so, you know, can it be complicated? Yeah, it can dive deep and it's something that takes time. I did hear that going to a financial advisor is like going to the dentist. I don't know about that, but I'm sure a lot of people would much rather do something other than go to the dentist or see their financial advisor.

You know, so what if my spouse and I disagree? A financial professional is trained to listen to your concerns, identify any underlying issues and help you find common ground. You know, we're not psychologists, we're not psychiatrists, but, you know, we are there to listen and that's really what we're here to do. And so a lot of times, you know, people disagree and so we'll try to find that common ground.

You know, I've had clients in the past that, and this is going to make you probably laugh, that they hated their kids, but they loved their grandkids. So they didn't want to leave any money to their kids, but they wanted to leave most of their money to their grandkids. And so, you know, that can be set up that way, you know. And so some people have a misconception, can I still control my own portfolio, my own finances?

Well, absolutely. Financial professionals make recommendations, not decisions. You know, so the recommendations we're giving you, and I say we meaning me, that, you know, ultimately you're the decision maker. You know, you're the person that makes all the decisions and we're here to listen, make recommendations based on our knowledge and experience and work as a cohesive team.

So you know, those are a couple things in the financial planning process, you know, some basics, a high level overview. And once again, it, you know, it can get complicated. I have some great tools that will help put this out on paper. You know, Steve Jobs used to like to say, if you don't write down your dreams, it's just a wish.

So we make sure that we write everything down and we have that written plan, if so desired. And so we have that plan and we can look at it, we can review it and, you know, life changes, life throws us curve balls. So we want to make sure that we keep up with those changes. And by having a plan to do that, you know, we can make those adjustments and, you know, hopefully when life throws us one of those curve balls, we'll be prepared for it.

And, you know, by having financial planning, it certainly helps going forward and, you know, just really makes less worry in your life. We're all trying to de-stress in our life, right? No stress and stress-free and by having a sound financial plan, when certainly markets do what they do, like this week, you know, you just look at it and you say, well, it's just part of another week, it's not great, it doesn't feel good. But we know that we have a financial plan and we're on track and that this short term, you know, in the market will not affect our plan going out three to five years.

You know, the one thing too, is you can be tactical in times like these. And I think that's where a financial professional will help in this scenario is that you can be strategic and you can be tactical in financial plans, certainly in investment plans and in investments, whereas, you know, you may be busy in your career, you may be busy in your retirement, and these are the things that we do day in and day out. So, you know, that's really just kind of financial planning in a nutshell. You know, give me a call for, you know, more exact process.

We have a great process in place that goes over financial planning and I think you'd be fairly happy to say that, you know, we can get something together for you. On my website, on the first page, I do have an example of a full financial plan, I nickname it the Kitchen Sink. You can download it, it's a PDF, it's about 50, 60 pages. It is nuts to bolts of a financial plan, so give it a look at tdwealth.net and you can see what that financial plan looks like.

Well, part two of this episode, we're going to talk about deciding when to retire and when timing becomes critical. And certainly, if you had pegged this year to retire with your assets and you've seen them go down, I'm sure it can be disturbing. But hopefully, leading up, your portfolio became more conservative in nature and you're not seeing the declines that to match the S&P 500 or some other index like that. Maybe some of you that are listening are getting ready to retire or maybe three to five years out of retirement and now is when you start making those preparations.

You know, you've seen your assets decline this year, S&P down over 17%, NASDAQ over 25% and I'm sure it's affected your portfolio and you're saying, oh my God, I may have to work another five years before I can retire. And naturally, now is the time when you want to start making those adjustments in your portfolio. If they were too aggressive to begin with, you can certainly start reallocating some of those funds, but it really is going to take some homework to go in and work to look at that portfolio and make those adjustments. You know, you have to start looking at fixed income because once you retire, that income stream stops.

So where is that income going to come from? Is it going to come from Social Security? Maybe you have a pension. Maybe you had prepared to live on your assets that have gone down this year.

And so those are things that you want to look at. Delaying retirement may be an option. Maybe you say, well, I could go another couple of years. I'm not going to retire at 65.

Maybe I'll work until I'm 70. I enjoy what I do and certainly that is an option for some people. And also that goes along the lines with delaying your Social Security. Obviously the longer you delay it, generally the more income you will have in retirement.

So just moving my notes here, you know, you get a phased in retirement. You kind of get the best of both worlds where you partially retire, you know, you just have to go in and do some of that financial planning where it's, you know, making a budget, making sure that you have enough emergency funds, you know, if something goes wrong and, you know, being able to live inside that budget. You know, it's all about lifestyle. Retirement changes, you know, people wake up and say, you know, I don't want to do this anymore.

I want to do something else. Well, that's great. What's it going to cost you? And you really need to sit down there and figure it out.

A lot of people, you know, like to, they love to travel. They say, I've worked all my life and now's the time to travel. Well, you can plan for that. You can plan for that inside your portfolio.

You know, you can plan for that inside your investments. You know, what we like to do here is we can open multiple accounts for different investment plans. So, you know, you have a five-year plan. I'm sure a lot of you heard of the bucket theory.

You know, a five-year bucket, 10-year bucket, 20-year bucket, whatever you want to call it. So, you have investments that are specifically for those goals within those 5, 10, 20 years, you know. And so, by planning accordingly and investing with that mindset, generally you can get rewarded. You know, I'm reminded of the term that, you know, if you fail to plan, you plan to fail and, you know, that really resonates with financial planning.

So, you know, a couple of things to think about in retirement, you know, it's a state of mind and, you know, that state of mind can change. You know, maybe you're tired of playing golf every day and you say, well, you know, now I want to travel. Or maybe you're done traveling and you say, well, you know, now I want to sit by the beach in a condo and go play golf. You know, it's just, it's a state of mind and it changes and I can't tell you how many people I know that have retired and went back to work because they get bored.

And they don't find what they're doing, there's no challenge and they want a reason to wake up every morning other than to just play and do something other than, you know, golf or travel. So, you know, reach out, talk to your advisor, call myself, you know, I can help you with those things. That's what I do here. And so with that, hopefully you enjoyed this episode.

Once again, don't forget to like and subscribe, download the podcast and, you know, I hope you have a great weekend and look forward to seeing everyone next week. Bye.