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Market Behaviors to Consider

The first thing I do when I wake up in the morning is I open the Wall Street Journal. I look at the front page stories and I check how futures are doing. I check how the stock market is trading before it actually opens. So I get a sense of what the feeling is in the market. On the weekends, I read Barrons.

I read articles about how the market just did the past week, as well as hear pundits and experts talking about how they expect the market to perform in the coming months. When I'm in my car, I listen to Bloomberg radio where I hear,

experts talk about how the market is trading that day and why, and give their opinions about what to expect the next day.

Look, I've retained all these habits from my previous career as an institutional investor. I'm interested in markets. I'm interested in understanding what will move them, what's coming up and what everyone expects to be changing. But what have I learned from working with individuals like you?  You can have the best portfolio in the world.

You could be well diversified in different markets, both United States and overseas and own stocks and bonds, individual stocks, mutual funds, ETFs. You can have low cost funds. None of that matters, if the moment there's a decline in the market, you freak out and sell everything. The most important work that you can do with an investment professional is both understanding the risk you need to take to meet your individual life goals

and then, just as importantly, understanding the risk you are comfortable taking. Because the market will inevitably have periods of time when it trades down. And if you can't sleep at night, if you can't hold on to the riskier parts of your investment portfolio, the parts that help you grow your money so that it lasts into old age.

If you don't have the ability to hold on during market downturns, any plan you have in place is not worth the paper that it's on. So I urge you when putting together an investment portfolio, work with a professional to understand the risk you need to take, and the risk you are able, and you are emotionally wired to take.

If you have any questions, please reach out to me. My name is Laura Rotter of True Abundance Advisors. I would love to help you put together an investment portfolio so that you can live your life on purpose.