Savant Wealth Management

Let it go, let it go
Can’t hold it back anymore
Let it go, let it go
Turn away and slam the door
I don’t care what they’re going to say
Let the markets rage on
The bears never bothered me anyway…

Adapted from “Let It Go,” by Robert Lopez and Kristen Anderson-Lopez/Robert Lopez
© Walt Disney Music Company

If you had young children or grandchildren in 2013, chances are they were obsessed by the Disney blockbuster Frozen. At the end of the first act, lead character Elsa – feeling isolated and frustrated – flees her own coronation and uses her magical powers to plunge her town, Arendelle, into perpetual winter. She’s tired of trying to hide her powers and worrying about what others think. “Let It Go,” the hit song from the movie, becomes Elsa’s defiant anthem as she feels empowered to live life as she wants it.

National “Let It Go” day is one of those invented holidays that occurs each year on June 23. The point? To forget about the things that make us regretful, guilty, or embarrassed, and to resolve to let go of our worries. So, if our ongoing inflation and market volatility have you feeling full of regret and worry, why not embrace the idea – not just on June 23 – but for the foreseeable future? Here’s a framework to help you get started:

1 – Tune out the noise.

News headlines can be a great source of frustration and stress, especially when the markets turn sour. So, instead of letting news reports make you feel bad, turn off the TV. Stop reading news on your phone. Let it go because what the news won’t tell you is that these situations are temporary. As this video by Dimensional Fund Advisors explains, market behavior is a lot like the weather. No one expects the sun to shine every day – we know that the weather will likely change. (Even Mark Twain, who spent years living in Connecticut, said, “If you don’t like the weather in New England now, just wait a few minutes.”)

2 – Exhale

As Joshua Fields Millburn, part of The Minimalists, wrote: “Letting go is not something you do. It’s something you stop doing.” So stop holding your breath. Instead, realize that major events – like interest rates rising, the war in Ukraine, a possible recession, COVID-19, and more – may have an influence on stock prices. We can’t predict how and when this will happen, or how much of an impact we can expect.

3 – Stop checking your investment accounts.

When markets become volatile, resist the urge to check your accounts every day. That’s because research by behavioral economists found that checking accounts daily could cause you to react too negatively to recent losses. In The Effect of Myopia and Loss Aversion on Risk Taking: An Experimental Test, researchers defined the problem as “myopic loss aversion” – a tendency to take more risks, like selling everything and moving to cash or chasing the latest meme stock, when you’re feeling sensitive to losses.

4 – Lean on your financial advisor for perspective.

A critical role advisors play involves acting as an accountability coach for clients. Your advisor has access to loads of data that may explain, in more balanced terms, what’s happening and why. Advisors who place their clients’ interests first plan for volatile situations by making sure client portfolios are properly diversified to help reduce the risk of large losses. Your advisor also understands the potential negative impact of emotional investing and can help you understand why taking immediate action may not reduce your anxiety in the way you think it might.

Remember, uncertainty is one reason why investors can earn a return over time. If we knew exactly how the markets would perform, we couldn’t expect to earn anything more than the risk-free rate. Staying realistic, keeping a long-term view of markets, exercising discipline, and maintaining a globally diversified portfolio can help prepare you for market volatility. So, when you’re feeling anxious, let it go. Your future self will be glad you did.

About Savant Wealth Management

Savant Wealth Management is a leading independent, nationally recognized, fee-only firm serving clients for over 30 years. As a trusted advisor, Savant Wealth Management offers investment management, financial planning, retirement plan and family office services to financially established individuals and institutions. Savant also offers corporate accounting, tax preparation, payroll and consulting through its affiliate, Savant Tax & Consulting.

©2022 Savant Capital, LLC dba Savant Wealth Management. All rights reserved.

Savant Wealth Management (“Savant”) is an SEC registered investment adviser headquartered in Rockford, Illinois. Past performance may not be indicative of future results. Different types of investments involve varying degrees of risk. Therefore, it should not be assumed that future performance of any specific investment or investment strategy, including the investments and/or investment strategies recommended and/or undertaken by Savant, or any non-investment related services, will be profitable, equal any historical performance levels, be suitable for your portfolio or individual situation, or prove successful. The scope of the services to be provided depends upon the needs of the client and the terms of the engagement. A copy of our current written disclosure Brochure discussing our advisory services and fees is available upon request or at www.savantwealth.com. Please see our Important Disclosures.