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.

The value of a steady relationship in uncertain times

What drove the volatility and wild gyrations in the financial markets in the last quarter of 2018?

How many times did you ask yourself that question as you watched daily swings of hundreds of points?

Explanations are many and varied.

Writing in The New York Post in December, for instance, Fox Business financial analyst Charles Gasparino, said volatility results from the way stocks are traded today—through “computer programs looking for an instant edge.”

“Thanks to the rapid-fire nature of computerized trading, the Dow could be up 400 points on minute and down several minutes later,” he wrote.

So is this the new normal? Maybe.

Whether it is or not—or to what degree—the value of partnering with a trusted financial planner cannot be overestimated.

Take advantage of personalized, responsive service at every step of your financial journey

Partnering with a financial planner with the insights, experience and resources to customize an investing strategy that anticipates and prepares for the unexpected.

A diversified portfolio that mitigates risk while taking advantage of opportunities that can be hidden in the uncertainty, one of the facets of uncommon care that a trusted financial planner delivers in managing your wealth.

That level of expertise includes understanding you, your tolerance for risk now and the financial resources you’ll need in the future, backing your financial plan with a full spectrum of services and products, such as long-term care insurance, building a protective cushion with life insurance, and combining protection and tax-advantaged growth opportunities with annuities.

At the end of the day, the objective of working with a financial planning team is to ensure your overall strategy protects your way of life and your ability to reach your goals even when the unexpected happens.

Glen D. Smith, CFP®, CRPC®
Chief Executive Officer | Chief Investment Officer | Founder

Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC. Investment advisory services are offered through Raymond James Financial Services Advisors, Inc. GDS Wealth Management is not a registered broker dealer and is independent of Raymond James Financial

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