How to Stay Steadfast with Your Investment Objectives


So far it has been anything but smooth sailing with our economic landscape. From inflation to global conflicts, sometimes the most difficult thing is to understand how to stay centered with your investment objectives. No matter if you have short or long term investments, multiple retirement plans, or even inherited a chuck of money, here are five key points to consider when it comes to understanding your investment objectives and how to stay steadfast during these unpredictable times.

Consider Your Time Horizon

If you know your time horizon, it’s going to help you invest your money much more appropriately. There’s always going to be times of upswings and dips in the market. Time in the market is going to mean more than trying to time the market. If you have money set aside for retirement, you’re going to have a longer time horizon in most circumstances.  This is not speculative money and timing the market can be counterproductive trying to figure out when to sell and buy back in. If you have the right expectation, that right time horizon for each of your retirement goals, you can find success.

Diversify Your Portfolio

Most people get nervous about losing money in the market and that’s part of the process. If most of your money is in the market and you need access to it in the next six months to a year, you probably have no business being in the market. Having a diversified portfolio is one way to strengthen your financial position and ensure that you’re sleeping well at night, no matter what’s going on with the economy.

Have an Emergency Fund

Do you have other resources, liquid resources to get through market volatility, or what we call the storms of life? Sometimes things happen and you need to have access to cash for a short-term expense or an unexpected health event. Do you have a plan in place that enables you to handle a copay, a deductible, or whatever comes up? Having an emergency fund is central to a good investment plan or even a retirement plan.

Understand Your Risk Tolerance

Risk tolerance is simply what kind of measure you theoretically could take on as a loss on paper without hitting your uncle point. If you’re a younger person and are saving for retirement, you probably want a little more risk built into your plan because you want that upside potential. If you’re thinking about retiring in the next six months to a year, you probably want to remove some of that risk as well. If you are in a position that you’re blessed with a pension, have rental income, annuity or other income generating investment, this could help reduce the dependency on your other investments for income and could allow you to take on more risk.  Understanding your risk tolerance is a conversation that you should have with your financial planner and is something that should be a factored into your financial or retirement plan.

Set the Right Expectations

It’s fair to say that we have been in a bull market over the past 10 years. People want the market gains, but when the market takes a step back, they get anxious. There are going to be periods where the market is going to be in a correction, or maybe even a bear market. It’s important to recalibrate what’s real in terms of what you should expect from your investments. If you set the right expectations for investing, you will be in a much better position to achieve your financial or retirement goals.

If you’re interested in having a conversation about your investment objectives, consider talking with one of our financial planners at Financial Dynamics & Associates, Inc. As a firm focused on creating customized retirement plans in the Midlothian and Richmond, Virginia metro area, we may be able to help advise you based on your overall financial situation.

Advisory services offered through J.W. Cole Advisors, Inc. J.W. Cole Advisors, Inc., and Financial Dynamics and Associates, Inc. are unaffiliated entities.