Better navigating uncertain times

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Better navigating uncertain times

Stienemarié Bonsma-Potgieter, CFP® – Financial Planner

In the wake of South Africa’s recent election, we find ourselves navigating a period of significant uncertainty. During such times, making sound financial decisions to secure our future becomes crucial. This article was inspired by a quote I recently came across at a function, “The best long-term investors are those that consistently make good decisions in highly uncertain scenarios.” Here are some strategies to help us make consistently good decisions and maintain financial stability, even when it feels like the world around us is falling apart.

1. Manage Cashflow and Live Within Your Means

One of the foundational aspects of financial stability is effective cash flow management. Ensure that you are not living above your means. Prioritize investing in your future by creating a budget that includes saving and investing before mindlessly spending. Doing so can build a financial foundation that will support you even during uncertain times.

2. Set Up Debit Orders and Automatic Contributions

Automating your investments can be a game-changer. By setting up debit orders or automatic contributions, you eliminate the need to time the market, a practice that can often be costly and stressful. Regular contributions ensure that you remain disciplined in your investment strategy and continue to build wealth consistently over time.

3. Keep Emotions in Check

Market volatility can be unsettling, especially when tracking your investment portfolio daily. It’s natural to feel tempted to move in and out of the market in response to short-term fluctuations. However, staying invested for the long term usually leads to better results. By keeping your emotions in check and avoiding impulsive decisions, you can benefit from the market’s overall upward trajectory over time.

4. Focus on Your Own Investment Goals

It’s easy to be influenced by the investment successes of friends and family, but it’s important to remember that you often hear only about their wins, not their losses. Instead of comparing your progress to others, concentrate on your investment goals. By focusing on your financial journey, you can avoid the pitfalls of the fear of missing out and make decisions that are right for you and in line with your goals.

5. Control What You Can

In times of uncertainty, it’s important to focus on aspects of your financial plan that are in your control. This includes maintaining regular contributions to your investments, diversifying your asset allocation, and using tax-efficient structures. By concentrating on these elements, you can create a robust financial strategy that withstands market volatility.

Uncertain times require us to be more diligent and thoughtful in our financial planning. By managing our cash flow, automating investments, keeping emotions in check, focusing on personal goals, and controlling what we can, we can navigate uncertainty with confidence. These consistent good decisions will not only help us weather the storm but also move us closer to financial freedom.

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