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Investing Smart During Uncertain Times

Warren Buffett has a classic rule when it comes to market volatility:

“Be fearful when others are greedy and greedy when others are fearful”.

Investor anxiety normally tends to rise in step with market volatility because most people are concerned about trying to pick the best time to buy or sell. For instance, making investment decisions would be infinitely easier if there was complete certainty about when markets were headed for a bear market or a correction.

The Difference Between Price and Profits

The recent market turmoil triggered by the COVID-19 virus (and its possible impact on economic activity) brings to mind some observations by legendary investor Warren Buffett. During his years of investing, he has famously stated that in the short-run (days, weeks, and months) the investment markets are a voting machine. People buy and sell investments based on price momentum, or their emotions regarding how comfortable they are with the price direction over a few days or weeks.

The Basics of a Successful Financial Strategy

Before a sky scraper can reach for the clouds, it needs a very strong foundation. Once the building is complete, the foundation is virtually unseen. The same goes for a financial strategy. The following are the basics of a strong financial foundation:

Budget - Governments and businesses use budgets to properly allocate resources. It's known as good business. A budget can help you figure out where your hard earned income is going and to identify ways to cut spending or increase savings.

Healthcare and Retirement

We are all familiar with the following perennial adage: “health is wealth”. Regardless of any financial circumstances you may have, optimum health allows you to enjoy long trips overseas, partake in your grandchildren’s life, physical activities such as golf as well as looking forward to your retirement years. No one wants to have to worry about the expenses that come with health problems in retirement.

How is Your Financial Parachute?

Most of us take for granted that we will be able to get out of bed every morning and go to work to earn a living. We base all of our financial plans on this seemingly obvious concept. Our most valuable asset is the ability to earn an income. Unfortunately, it is also one of the most vulnerable and most of the undesirable things that can affect it are beyond our control.

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