The VIX, or so called fear index, has surged 33% since Labor Day, from 12 to 16, as election and Fed rate hike fears have turned the market choppy. Yvette Butler, president of Capital One Investing, said scary markets can serve as reminder to assess goals and performance. “Just as your kids head back to the classroom, we like to suggest our clients check in with their advisor and review their financial plan,” said Butler. “Make it a habit to do this on a regular basis so you know what to expect from your personal bottom line at the end of the year.” In her view, September is a great time for investors to check-in on their strategy and revisit their portfolios. She advises investors talk to their advisors about decisions that may pay off in the future, like setting up or maxing out an IRA. Butler said Capital One surveyed investors during a period of market volatility earlier this summer, and found a quarter of investors are actively looking to buy and sell during volatile markets. “Talk to your advisor about how to pair his or her expertise with the right technology and tools that will help you best reach your goals. Also make sure you have the right strategic asset allocation for your goals,” said Butler. “Ask your advisor to review your holdings to make sure you are suitably diversified. If a significant portion of your investments are vulnerable to the same market dynamics, you may wish to discuss recalibrating your asset allocation over time to create a safer, more risk-averse portfolio.” On the topic of rebalancing, Butler said she does not recommend “reacting” to market events or volatility, as that can lead investors to sell low. Rather, she suggests quarterly or twice yearly check-ins with an advisor. “Remember, most long-term investing strategies will experience volatility over the years, and investors need to get comfortable with keeping their eyes on the prize and tune out intraday trading drama or noise,” said Butler. “If your plan includes exposure to risky assets, remind yourself that riding the volatility is part of your plan. Market events may also be buying opportunities, but it’s important to respond to these events with a cool head and not rebalance out of fear. It’s never helpful to make investing decisions based on emotion.”
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