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How to Handle Market Volatility at the End of the Year

For me, the fall brings all the things that I love – football, apple picking, watching my kids play sports, having my kids go back to school and then, later in the fall, comes Thanksgiving and more football. From a market perspective, however, September and October tend to be the worst performing months historically. Tack on a divisive election and a Federal Reserve that cannot make up its mind whether to raise interest rates, it’s no wonder people are on edge when it comes to their finances.

Here are some tips and thoughts on how to handle emotionally what I like to call “the high tide of the silly season.” 

Dealing With Chaos

  • Turn off the news. No matter what your political persuasion, TV news is less about facts and more about advertising dollars. How do you get more advertising dollars? Get more viewers. How do you get more viewers? Be as hyperbolic as possible. Try to scare as many people as possible to your point of view. Run election trading specials and which stocks to hold if X wins. None of this helps psychologically and a lot of the time they tend to be contrary indicators—meaning that the exact opposite will happen. We all should be informed citizens, but TV sources of news do less to educate the public than just about any other medium. 
  • Never make investment decisions off the headlines. This is tied to my first point. Making an emotional investment decision in general tends not to work out. Investing based on a headline or TV news is potentially the greatest threat to your investments and financial security. Most headlines tend to be late in the cycle—think of the magazine covers in 1982 all saying something to the effect of “The Death of Stocks”—or at the actual inflection point in the market where the opposite is about to happen. One way to overcome emotional investing is to work with an advisor who has an investment process. Having a process helps with the emotions of investing and brings a greater discipline to achieving one’s goals. (For related reading, see: Find a New Financial Advisor Who's Right for You.)
  • If you're still panicking, review your financial plan. Speed up the annual plan review so you can find some comfort and have knowledge of where you stand in relation to your goals and objectives. Advisors exist to review where you are in relation to your goals and run several scenarios to help bring clarity to your situation. 
  • Find your inner zen. Exercise and sunlight are great ways to help with any financial stress or anxiety. Getting outdoors in the beautiful fall weather and going for late evening walks all contribute to better sleep and decreased cortisol levels. Reading a book 30 minutes before bed can also help reduce stress levels. 
  • This too shall pass. Elections come and go. Markets go up and down. Even September and October give way to the historically better investment months of November through March. No one has a crystal ball on what the future brings, but having a long-term, disciplined approach to your finances and investments will help you navigate the short-term fluctuations both in the markets and in life. (For more, see: The Advantages of an Active Management Strategy.)


Milestone Wealth Advisors, Inc. is a Registered Investment Advisor. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.