Articles - Archived Expert Advice

Protecting Market Investments

I've got some money in the stock market, and I don't even want to look at my statements anymore! Is there anything I can I do to protect my investments in this volatile market?

Everyone is concerned about the risk and volatility in the stock market because their portfolios are down. Before making any hasty decisions, review your original investment plan.

The loss of investment principle is not easy to accept. Market risk is real because we see the paper losses on our statements. Review your risk tolerance and time frame for withdrawing these funds to see if anything has changed. Hopefully, your portfolio is diversified and you can ride this market out. Don't bail out of your stock funds completely. Selling investments with paper losses converts them into permanent losses. Stocks are still the best growth vehicles for the long haul.

You may want to seek the help of a financial advisor to help make investment decisions. If so, protect yourself by knowing the answers to these questions:

• How long has the company been in business?
• How will you be compensated?
• Will you review my portfolio?
• Are my assets held in "street" or "nominee" name?

Most investors don't understand the difference between holding securities in street name verses nominee name. Brokerage firms typically hold assets in street name, meaning they are registered in the name of the firm. If the firm files for bankruptcy, you could be restricted from selling your securities and could be subject to creditors. Trust companies, on the other hand, hold assets in the name of a nominee separate from itself, protecting you in the event of bankruptcy.

Need help putting your plan together? Call an LGFCU financial planner free of charge at 877.367.5428.