Your Savings and Investments: You can't Hide, Joel & Tema Steele, Steele Financial Solutions

Author’s note: Tema and Joel Steele are a mother and son financial services team at Steele Financial Solutions in Cherry Hill.  Tema Steele founded the business more than 30 years ago. Tema and Joel provide sound financial retirement strategies for their clients throughout the Philadelphia and South Jersey region. Learn more at www.steelefinancialsolutions.com.

There’s something that significantly influences the financial markets and it’s rarely mentioned. This also may heavily influence you and your financial decisions. Unless you are living under a rock you can’t ignore the hype and commotion when the market is volatile and when economic headlines are being discussed. Not long ago, if you wanted to know what was going on in the world, you would read the newspaper or check the TV news or radio. Today, the internet, cell phones, and social media puts the news at your fingertips. The bottom line: You should take the news with a grain of salt before deciding what action you should take with your finances.

What we’re really talking about is “headline risk.” Headline risk is officially defined as the possibility that a news story will adversely affect a stock price. Headline risk can also impact the performance of the stock market as a whole. Your personal financial decisions should be made with a cool hand. You don’t want to make knee-jerk reactions to news you hear or what someone tells you. Additionally, rumors and myths can muddy the waters. It is important to make your decision based on facts and reality. Psychological factors should play into your financial affairs as well. I’m not talking about fear and anxiety playing a role. I mean your likes and dislikes and discovering your goals, risk tolerance, etc. If you retired to find yourself checking your investments every day, is that what you really want to be worrying about and focusing on during your “golden years?”

Here’s a news flash: Things will happen, good and bad, that will affect our economy and the markets. Virtually all investments are cyclical. They go up and down. Nobody knows how much and when. One of my favorite mantras is, “Know what you are going to do in a situation before you are in it.” This can be applied to finances in many cases. The most obvious is that you don’t want to hold your aggressive investments while they are high in value and then panic and sell them when the market drops. A good financial advisor can be a solid resource to help you make the best decisions for you. If you rely on TV, radio, and other media you are getting generalized advice at best. Most often you are dealing with entertainment, not real, solid financial advice. There is no one-size-fits-all so your reaction to headlines and other news should not necessarily be the same as everyone else.

A recent example of news travelling at the speed of light was the Federal Reserve’s indecision on what they planned to do with interest rates. Leading up to the announcement a few weeks ago, the media and financial correspondents hung on every word, clue and hint of what they were going to say. This and many other tidbits of news have become so built up and buzzed about, it’s gotten out of control. Many media outlets fixate on things and hype them up so much that the casual investor starts to wonder and worry what they should do. You want to minimize anxiety in retirement. The best way to do this is to have an all-weather financial strategy so you don’t feel the need to rush to make changes based on the news or general chatter.

Your financial position needs to be solid to get you through current economic times and well into the future. We’re going to have our fair share of ups and downs. Your financial house needs to be custom built for you to your specifications. You chose the home you live in now and decorated it to suit your tastes. If you weren’t sure what to do you might have hired an interior decorator for professional help. With your financial house, a Financial Services Professional can help make sure things are most suitably designed for you. Don’t let other people or news dictate your financial house.