Solutions 4 Financial Independence: 02/13/18

By  | 

BRIDGEPORT, W.Va (WDTV)- Question: The Trump economy seems to be really rolling, should I be worried about a recession anytime soon?

Answer (John Halterman-Beacon Wealth Management): "Lori, you know what, I have to tell you that that is smart thinking. Most people, when the markets are going well, they have a tendency to think there is no risk.

To me, that is actually one of the biggest challenges because when I look at the challenges of investing I think of three things. How do you deal with volatility of recession? How do you deal with your emotions that come with the volatility? Then, how to actually manage your money."

Question: What are some steps you can take to follow along?

Answer (John Halterman-Beacon Wealth Management): "I think the biggest thing is that when you look at the third part, which is strategy, you really have to be thinking what process should I follow?

People allow emotion to step in and do too many things and they make decisions irrationally because the markets are either going really well and jumping in when it’s really high, or panicking and getting out when it’s really low.

What I tell people is establish a basic, basic process. A good example of that is, number one, I’m not a believer that you shouldn’t ever change your investments. I think you have to identify what the market conditions are.

Then once you identify the conditions, you have to decide what your portfolio composition is actually going to be.

Then you have to have a selection criteria of what actual investments to put in there. If you don’t do it that way, then really you are just kind of winging it.

Risk management is really the most important key to investing. Chasing returns doesn’t mean anything because we all can make money on the upside. It’s how much you lose on the downside that is really going to affect you most in the long run."