Financial expert explains why it’s important to stay invested through turbulent times

WAFF 48's Sean Dowling reporting
Published: Nov. 14, 2023 at 10:57 PM CST
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HUNTSVILLE, Ala. (WAFF) - Staying invested through turbulent times is hard, even for seasoned professionals. That’s why financial expert, Jay McGowan from The Welch Group says it’s important to stay the course.

“With all the headlines out there, especially recent headlines, geopolitical events, wars, inflation, things like that, it is a natural emotion to feel scared of the stock market,” McGowan said.

The wealth management expert adds that it’s normal to want to be in during the good times and out during the bad times. Unfortunately, McGowan says it’s nearly impossible to predict and replicate.

Over time, the Certified Financial Planner crunched the numbers for the S&P 500 from 1930 to 2020.

“If you just stayed invested, your total price appreciation was almost 18,000% over that 90-year period, which is a good return,” McGowan said. “That would be plenty to help most people achieve their goals as far as a stock market performance.”

McGowan’s point is that it’s important to stay invested for the long haul. The financial expert says instead of trying to time the market, manage your risk instead.

“Most portfolios, when we’re talking about investments are made up of kind of two components. There’s fixed income or bonds and there are stocks.,” McGowan said.

He added those close to retirement age should have at least eight to 10 years worth of cash flow needs from their portfolio in those safer types of investments, and then have the remaining portion of one’s portfolio in stocks.

“These are things that give you growth over time. They help you keep up with inflation, and they can help you reach those goals of longevity, keeping up with the market,” McGowan said.

Finally, the wealth management expert says it’s important to stay diversified when it comes to your portfolio.

For more ways to stay financially savvy, visit The Welch Group’s website.

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