The stock market has been in a state of volatility for much of the past two years but it seems like that uncertainty has ramped up even more in recent months. When we get into one of these up-and-down environments, what’s the best way to invest your money without taking on too much risk?
If you were hoping for a quiet and steady start to 2022, it doesn’t look like we’re going to get that anytime soon. Just look at some of the largest tech companies that have taken big hits already and earnings haven’t helped matters much either.
But these periods of volatility are inevitable when it comes to the market and there are ways to approach this when investing. In this episode of the Money Wisdom podcast, we’re going to talk about how to find the proper balance while limiting the amount of risk you’re comfortable taking.
When these turbulent times creep up, a lot of people will look to those large companies and blue chip stocks to find safety. An easy choice is an S&P 500 Index Fund but even that will be heavily weighted towards the top five or so companies. So while you think you’re taking a safer approach, you still end up being heavily invested in a small number of companies.
You’ll hear us talk about it a lot but it’s important to focus on diversification. This is even more true for those people that are at or near retirement and don’t want to take on all the risk of the market.
It’s okay to own the S&P 500 fund but you also might have a small cap fund and an international fund for instance. Finding different types of equities that fall into various categories helps mitigate some of that risk.
Diversification also means you should probably have some safe money, whether that means owning CDs or fixed annuities. There are some options beyond a traditional savings account that will allow you to still generate growth but limit your upside. It’s all about finding the right blend that allows you to stay exposed to the market while also keeping enough safe money to ease your worries.
These volatile times are also a great reminder that working with an advisor will serve your needs best. Having someone that’s focused on your goals and finding the investments that best align with them will give you the best long-term outcome. Working with someone that’s just trying to push you into certain investments and selling you specific products should raise a red flag.
It shouldn’t always be about the product. For us, it’s all about the plan. Our clients might not know every product that we’ve identified for them. Remember, there’s nothing wrong with a stockbroker. The issue arises when that broker acts as if they’re an advisor.
So listen through the podcast and hear what Joel Johnson has to say about this current environment we’re investing in and make sure you reach out with any questions you have.
0:32 – Volatility in the stock market
2:46 – Index funds safer?
4:48 – Strategies for diversification
6:57 – Is your advisor focused on planning or selling?
8:50 – How our process has evolved
12:35 – An overview of our process
“We always felt our financial needs were in very capable hands. Alex Angst is great to work with. Our advisor always made us feel he had our best interests at heart and explained things so we could understand them.”
“We’ve been clients of Johnson-Brunetti for > 10 years. We’re enjoying a comfortable retirement as a result. Many thanks to Joel and our CFP, Eric Hogarth. I wish we had plugged into this decade approach back when we were in our 30s.”
“Working with Johnson Brunetti has had a positive impact on my life by providing me with the knowledge, confidence, and peace of mind to move forward with my retirement plans. The process of getting to this point, through their guidance, has been informative and pleasurable.”
“I view your company as one that puts my interests first. I think that is very uncommon and very refreshing. “
“Matt does an awesome job! So easy to understand and he listens to our concerns and addresses them! happy I chose your firm!”
“I have been pleased with the help and service I have received from the company. I have met several team members on Eric’s team and have found all of them very well prepared to meet with me when reviewing my portfolio. I always feel that I am an important customer and appreciate that very much. I hope the firm continues to focus on the customer and maintains its great service. I think you do a great job for someone like me!!!! I’m happy I chose your firm!”
Investment Advisory Services offered through JB Capital, LLC.
Insurance Products offered through JN Financial, LLC.
Atlanta • Boston • Hartford | Tel: 800-208-7233
JB Capital LLC is a federally registered investment adviser under the Investment Advisers Act of 1940. Registration as an investment adviser does not imply any level of skill or training. Information presented is for educational purposes only and is not intended as an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies.
Johnson Brunetti is a sponsor of WFSB Better Money, WCVB Better Money Boston, WSB-TV Better Money Atlanta, WTNH Money Wisdom, and WTIC Money Wisdom.