Depending on what stage we are in our lives, we experience uncertainty, market upheaval, and high cost of living, differently. For those closer to pension, uncertainty and market upheaval erodes our savings; for the young, where long term growth is the goal, learning to observe, study and re-align options for saving and investing is a different ball game altogether.
Financial Trends Throughout Life
There are certain common threads that are symbiotic across ages:
- Can’t time the market, but can observe and re-align
- Whether invested in a pension fund, or managing savings through investments in the stock market, the first rule taught is that no one can time the market. Given the volatility, one can observe trends and decide how much risk appetite their savings can take and re-align allocation of stocks, bonds, and/or alternatives
- Position investments to balance short term volatility
- Liquidate to cut losses only after careful analysis and advice
- Seek low risk yield bonds with AAA rating
- Seek views and advice
- Discuss with trusted friends their views and strategies in managing volatility. They may have ideas worth considering
- Listen to podcasts, review analyses by experts and only act upon information if the consequence on your decisions is fully understood
Adjusting to the Behavior of Financial Markets
- If the market is volatile, it means it seeks clarity
- When clarity is in the hands of politicians it rarely succeeds. We need technocrats with experience, leadership ability to design policies and communicate with clarity for markets to ease and our lives to balance
- Control Saving and Spending and position investments to balance short term volatility
- Long term growth is the goal, so if there is the discipline to re-adjust saving and spending to create more comfort in cash flow and in saving pot (cash saving wallets) then emotional nervousness can ease
Things to Consider During High Interest Rates and Market Upheaval
- Managing debt in time of high interest rates and cost of living
- As interest rates rise, the cost of debt and monthly instalments rise
- Ensure that your cash flow is updated, more savings might be needed in order not to miss out on debt instalments
- Check with your bank or your financial institution how much is the difference on your instalment and if charges on your loan have changed
- Revisit your forward looking cash flow to ensure you are fully aware of the impact on your lifestyle. More savings, more discipline might be needed. Spending less, saving more
In life, situations occur – and we are called to deal with them. Our readiness depends on our emotional, rational and financial balancing.
It is a fact that financial vulnerability erodes our emotional and rational wellbeing.
It is important to do the homework, seek advice, make decisions even if those imply hard and soft re-adjustments for the sake of our wellbeing.
Stay in touch and connect with the Queendom for advice, learnings, tools and tips. Don’t forget the precious forward looking cash flow as a tool to financial discipline, and emotional balancing.
Disclaimer: This is not financial advice. This is Queendom Wisdom. Please feel free to reach out to us should you have any questions