Managing Heisenberg: Volatility, uncertainty and growth

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Glen D. Smith

The Nobel physicist Werner Heisenberg is best known in the non-scientific community for his uncertainty principle–the position of a particle or its momentum, but not both simultaneously, can be measured.

Marked by wild swings in the last quarter of 2018, the financial markets’ gyrations are an object lesson in uncertainty — down 400 points, up 300, which way is it going?

And how do you manage your money in such volatility?

A steady relationship is critical in periods of volatility and uncertainty

Getting caught up in the daily closing figures is a great way to lose sight of long-term performance.

To illustrate how steady growth outperforms uneven growth, consider two portfolios:

One earns 7 percent steadily over 20 consecutive years.

The other earns 21 percent in even years and loses 7 percent in odd years over the same period.

It’s a little counter-intuitive, but the steady 7 percent growth portfolio outperforms the gain/loss scenario over the 20-year period because of the compound growth of the investments.

To maintain that steady growth, smart investors rely on long-term relationships with experienced financial planners rather than trying to keep up with the market on a transactional basis, particularly in periods of uncertainty.

One of the most important functions a financial planner serves is enabling you to protect all that you have worked to build by assessing risk and developing protections that you need and deserve.

Call 469–212–8072 | www.glendsmithandassociates.com | 1029 Long Prairie Road, Suite C, Flower Mound, TX 75022

Any opinions are those of Glen D. Smith and not necessarily those of RJFS or Raymond James. Securities offered through Raymond James Financial Services, Inc., member FINRA / SIPC. Investment advisory services offered through Raymond James Financial Services Advisors, Inc. Glen D. Smith and Associates is not a registered broker/dealer and is independent of Raymond James Financial Services, Inc. Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.

Raymond James is not affiliated with and does not endorse the opinions or services of the Financial Planners Association or the Certified Financial Planner Board of Standards Inc.

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