Covell Financial

No doubt you have seen what's been happening in the financial markets and are concerned about how it is affecting your portfolio.

The Federal Reserve cut two key interest rates on January 22 by three-quarters of a percentage point each, the largest cuts so far this century. The Fed took this unusual step in response to global fears of a U.S. recession that sparked a massive global stock sell-off the day before.

The world is watching what's going on here because the United States is still the world's leading economy. Other nations rely heavily on our ability to buy their exports and to provide a stabilizing influence in the global economy. And it looks as though the world is unhappy with what it sees.

The urgency with which the news media is treating this situation may cause you to think that it's time to do something drastic. Only time can tell us whether the current concerns about the health of the economy are valid, but now is not the time to let shortterm developments lure you out of your long-term strategy.

It's impossible to watch this type of stock market volatility without experiencing an emotional reaction. But allowing your emotions to guide decisions about your portfolio might possibly be the worst move you could make. This is the time when concepts such as diversification, asset allocation, and risk tolerance come into play.

However, if you still have concerns about what's happening and how these recent developments could affect progress toward your long-term financial goals, we would be happy to address your questions.