Investing in Financial Markets Through the Ups and Down

By Kelly Wellborn, CFP®, President and Managing Executive of Cypress Capital Management, a subsidiary of WSFS Financial Corporation

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Reading Time: 3 minutes – Posted: November 2020
The resilience of the stock market during the pandemic is one of the more remarkable stories in this most unprecedented of years.

Despite COVID-19, a recession, social unrest and natural disasters, the Dow Jones Industrial average is up significantly since it cratered in March. The Standard & Poor’s 500 index has performed even better reaching an all-time high. The IPO market, meanwhile, is hotter than it has been in 20 years.

A recent study by WSFS Bank suggests investors in the Greater Philadelphia and Delaware region remain confident and even bullish heading into the final months of 2020. The WSFS Wealth Study of 350 consumers found that 67% believe life is riskier than before the pandemic. But the same number said their risk tolerance is the same or greater than it was prior to the onset of COVID-19 and that they are in good enough financial shape to cope with the unexpected.

Participants in the study completed in September were between the ages of 35 and 75 and had investable assets of $250,000 to more than $5 million.

The turbulence of the times means investor sentiment may turn quickly. We’re seeing some of that market volatility now as COVID-19 cases surge around the globe. The reality of a vaccine could fuel more positive momentum in the financial markets.

The WSFS Wealth Survey found that 30% said they plan to increase investing in coming months, while another 45% said they would increase investing while conserving some cash. Among the other highlights:

  • 56% of those surveyed said they were bullish on individual stocks, with just 19% saying they were unattractive.
  • 64% said mutual funds were attractive.
  • Just 31% were positive on bonds.
  • Investors were split on real estate as an investment – 33% said real estate was attractive, with 29% steering clear.

These areas may or may not be a focus of yours, but it is important to look at what risk levels may work for you and diversify.

So, what to make of this? Whether you are investing for you or for your business, I believe there are several key takeaways from the study.

Be in it for the long haul.
The best investment strategy is not necessarily the one with the greatest short-term returns. It’s the one that allows you to meet your long-term goals. These typically run the gamut from saving enough for retirement, purchasing a summer home or leaving a sizeable donation to your favorite charity.

Comfort is key.
The optimum investment strategy allows you to sleep at night. Consider your tolerance for risk, where you are in life’s journey and your expected rate of return. Be realistic. Outsized returns usually mean far more risk than a S&P 500 Index Fund.

Expect ups – and downs.
Not every year has swings like this one, but market volatility is a fact of life. It’s scary when the market seems to be in a freefall, but historically investing in the financial markets has proven to be the best method of making your money work for you.

Seek help.
When it comes to investing, few people can go at it alone. A good financial advisor will ask you questions about your goals and your risk tolerance and then – most importantly – listen to your responses and map out an effective long-term strategy. This is an important decision, so it makes sense to shop around. Compare fees, services to be provided and historical investment performance for sure. Just remember that this is a trusted relationship, and you need to feel confident and comfortable with your advisor.




About the Author – Kelly Wellborn, CFP®
Kelly Wellborn, CFP®, is the President and Managing Executive of Cypress Capital Management LLC, a subsidiary of WSFS Financial Corporation. She graduated from the University of Delaware with a BS in Accounting. As of 9/30/2020, Cypress Capital had more than $1.1 billion in client assets under management. You can contact Kelly at kwellborn@cypress-capital.com.

 



This article is provided by Cypress Capital Management, LLC ("Cypress" or the "Firm") for informational purposes only. Investing involves the risk of loss and investors should be prepared to bear potential losses. Past performance may not be indicative of future results and may have been impacted by events and economic conditions that will not prevail in the future. No portion of this commentary is to be construed as a solicitation to buy or sell a security or the provision of personalized investment, tax or legal advice. Certain information contained in this presentation is derived from sources that Cypress believes to be reliable; however, the Firm does not guarantee the accuracy or timeliness of such information and assumes no liability for any resulting damages.

Cypress is an SEC registered investment adviser that maintains a principal place of business in the Greenville, Delaware. The Firm may only transact business in those states in which it is notice filed or qualifies for a corresponding exemption from registration requirements. For more information about Cypress’ registration status and business operations, please consult the Firm’s Form ADV disclosure documents, the most recent versions of which are available on the SEC’s Investment Adviser Public Disclosure website at www.advisorinfo.sec.gov. Cypress is wholly owned by WSFS Financial Corporation.

 





  • investing
  • retirement
  • money management