The Financial Playbook for Tackling Market Volatility

by Benjamin Beck, CFP® Benjamin Beck, CFP® | April 7, 2023

Usually on the weekends , it’s movie night at the Beck House. I really enjoy inspirational sports movies, and this weekend we watched one of my personal favorites: Rudy. 

If you haven’t seen it, it’s about this kid in Illinois who has had lifelong dreams of playing football at Notre Dame, but was always told he was too small to play the game. He may not be the biggest guy, the strongest, or the fastest, but he has a steel iron focus. He doesn’t have a support system either, like a family that backs him or others that believe in him. He just works his butt off and takes rejection after rejection to accomplish his goal. I love this movie; it’s emotional, even though I have seen it several times. 


Play #1: Embrace Uncertainty to Discover Financial Opportunity

I can relate to the feelings that Rudy has along the way, the feeling of “this is hard … nothing’s going my way.” Early on in my career — especially in the first five years of becoming a financial advisor — times were tough, not the least of which was going through the worst financial disaster our world has faced since the Great Depression. 

I was thinking of the recent banking crisis we have all been hearing about in the news. Both as investors and as financial professionals in the short term, at least, we are at risk of being impacted by the financial, political, geopolitical, and economic chaos that has surrounded us not just this past year, but thinking back to the beginning of the pandemic.

With all the volatility that we've seen, it can start to feel like that this is just some kind of new normal that we're going through every day. We’re seeing a tremendous amount of volatility. Now we're hearing about some banks collapsing and needing government intervention. You may have been wondering, “What if I went to the sidelines for a while as an investor?” 

I will begin by acknowledging that there is a lot of uncertainty  out there. Thinking back to the first five years of my career, with hindsight, I also see now that there was also a lot of opportunity. Chaos provides opportunity.  Just like any other opportunity, this opportunity too will end at some point. But right now, we as financial advisors have an incredible opportunity to help people, and investors have a tremendous opportunity, too. At this time, it’s possible that we are going to see some of the greatest companies in the world at prices that we may not see again for a long time, or ever.  Once the chaos subsides, so will the opportunity. 


Play #2: Draft an Experienced Financial Advisor to Help You With A Plan 

Right now, people are confused. I remember back in 2007, 2008, 2009 even, not only were investors confused, but so were many financial advisors. An advisor who is hopelessly confused is no good to anyone. At Beck Bode, we have a golden moment of opportunity to offer our clients and other people in our lives a clear and understandable way to see this chaos for what it is, and to offer them a chance to get unstuck. 

You may wonder, what is the path forward? From my vantage point, it certainly is NOT us providing some economic outlook or forecast of “everything's going to be better three months from now.” We have said it again and again in our newsletters, in our articles, in conversations with our clients and with our team: the economy can never be forecast with any kind of consistency. The market can't be timed in any kind of precision. The way forward begins by acknowledging the fact that the markets and the economy are unknowable.

Instead, we embrace a plan. 

We sit down with our prospective clients or current clients and work with them to put together a comprehensive financial plan, and at the very least, a lifetime investment plan. Part of that planning process is the creation of an investment policy statement, or what we call a Goals Planning Statement (GPS)

The GPS captures the assumptions that have always ended up producing financial independence in the long run. I'll submit that a plan like that doesn't happen without using a financial planner. The way out of the chaos is to work on a plan with an experienced and skilled financial advisor. A conversation with an advisor needs to begin with the advisor truly understanding the emotions that you are feeling as an investor who is living through this chaos. 

If you’re thinking that this is crazy, that now is not the time to be invested in the markets, I would say not only is this the time to be investing, but it is also the time to implement a plan that provides a purposeful direction — a direction into which you can save and invest your money — in order to move toward a future goal of financial independence. Now is the time to do this important work.


Play #3:  Run Winning Long Term Investment Strategies to Beat Inflation

It’s during the more challenging times that you can solidify your relationship with your advisor. Is your advisor stepping up to help you emotionally? Are they able to pull your attention away from the chaos and focus on the future? 

If you are feeling like things are not going your way, that maybe you should give up for a while or go to the sidelines, I would like to offer you the possibility that maybe the moment we are in is not any more or less extreme than what we have faced before. This moment may not be significantly dissimilar to the chaos that was brought about by COVID-19 and all the aftereffects we continue to feel to this day. 

One of those aftereffects, of course, is inflation. Inflation has affected people’s lives as well as their perspectives. It is contributing significantly to the confusion a lot of people are facing today. 

Listen to the news and you may hear that corporate earnings might be down markedly for some time to come. Maybe so, but do we care as long-term investors? Is inflation moderating at least? Yes, but we are not out of the woods by any stretch. Who cares if we can just sit down with our clients and use this opportunity to plan their financial independence years into the future? The way out of the chaos and confusion begins with a conversation with a qualified professional, someone who is calm amid the chaos,  and who can offer a disciplined and proven approach to reaching your long term financial goal. 

Just like the hero in the movie Rudy, you don’t need to be the strongest, the fastest, or the most anything to reach your goal. What you do need is to stay focused on your goal, and hold an iron determination to stay in the game so you can see it come to fruition.

Learn more about Beck Bode’s investment management services.

Ben Beck is Managing Partner & Chief Investment Officer at Beck Bode, a deliberately different wealth management firm with a unique view on investing, business and life.

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