Will Market Volatility Drag Down Your Portfolio?

We’ve talked a lot about volatility this year. The markets have given us an end to an 11-year bull run, two all-time highs on the S&P, a 20-plus percent drop in value in the span of just a few weeks, and one of the shortest bear markets we’ve seen in a long time. And we’re not even in the 4th quarter of 2020 yet!

Even those who aren’t looking to retire in the next few years need to manage risk. Just as we work on tax management throughout the year, we also keep an eye on risk during the course of both the accumulation and the distribution phases of life. One risk that needs to be carefully considered is something called “volatility drag,” which can have a profoundly negative impact on your portfolio over the course of time.

How do you manage that? It all comes down to your approach to investing. Learn more about how volatility may affect you, and what you can potentially do about it, on this week’s edition of Lucia Capital Group Weekly with “Professor” Rick Plum, CFP®!

Important Information:

The information provided should not be considered specific tax, legal, or investment advice and is not specific to any individual’s personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

You should always seek counsel of the appropriate advisor prior to making any investment decision. All investments are subject to risk including the loss of principal. This material was gathered from sources believed to be reliable, however, its accuracy cannot be guaranteed.

These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable—we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

The S&P 500 Index is an unmanaged index and includes a representative sample of large-cap U.S. companies in leading industries. An investment may not be made directly in an index.

A dollar cost averaging strategy does not guarantee a profit or protection from loss. Since such an investment plan involves continual investment in securities regardless of fluctuating price levels, you must consider your willingness to continue purchasing during periods of high or low-price levels.

In the examples cited rates of return are hypothetical, are for illustrative purposes only, are not guaranteed, and do not represent the performance of any one investment. There is no guarantee that you will achieve the results illustrated or that the investment strategy will meet its stated objectives.

Rick Plum is a registered representative with, and securities and advisory services offered through LPL Financial, a registered investment advisor and member FINRA/SIPC. The investment professionals are affiliated with LPL Financial and are conducting business using the name Lucia Capital Group, a separate entity from LPL Financial.

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