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To Weather Market Volatility, Stay Invested for the Long Haul

By U.S. News & World Report

There are many things about our financial future that we can control, including our budgets, our spending habits and how we save. According to a recent survey, 80 percent of Americans say they feel in control of their financial futures. But no matter how in control we feel, even the smartest, savviest investor can’t control the market.

A key to weathering market volatility is staying invested for the long haul. The market will have its ups and downs, but using these tips can help you stay the course, so you can live the life you envision in retirement.

Don’t withdraw. With market downturns you may be tempted to move money out of your plans or withdraw assets. If you take money out of your plan, you’re missing out on compounded interest, as well as any gains that the market makes while that money isn’t invested. Making decisions based on what the market is doing short-term can negatively impact your long-term goals. Plus, there are tax implications to consider surrounding a withdrawal, and you could be subject to penalties and fees if you don’t pay back the loan.

Be realistic about your risk tolerance and goals. Think about what your retirement will look like. Do you want to continue to work into your retirement, or plan on having a part-time job? Would you rather focus your time on traveling, pursing a new hobby or volunteering? Then consider talking to a financial professional to understand and establish the investment strategy you will need to accomplish those goals. There are many risk tolerance questionnaires available online which, along with your financial professional, can help you understand your personal risk tolerance. A recent MOOD of America study commissioned on behalf of Lincoln Finanical Group showed that more than half of Americans believe that meeting with a financial professional is very important when it comes to taking charge of their financial futures.

Diversify your portfolio. A financial professional can help you understand the type of diversified portfolio that is right for you, based on your age, risk tolerance and goals. By diversifying among and within asset classes, you can help balance risk and return. As you get closer to retirement, you may want to move away from return-based to more income-based investments.

Rebalance to manage risk. While your risk tolerance may change as your get older and will affect how you allocate your assets, changes in the market can also change your asset allocation. Over time, your stocks and bonds may grow at different rates, which can alter your investment plan. By rebalancing your portfolio, you can get back to your target allocation. You also may be able to take advantage of auto-rebalancing if your plan offers it, or you may be able to invest in a target-date fund, which may automatically rebalance to ensure your allocation stays aligned with your goals.

Dealing with a volatile market isn’t easy, and leaving your money in the market as it fluctuates can feel difficult. But with these tips, the advice of your financial professional and a solid investment strategy, you can ride out the dips in the market and have the retirement you envision.

Results for the 2015 MOOD (Measuring Optimism, Outlook and Direction) of America poll are based on a national survey conducted by Whitman Insight Strategies (WINS) on behalf of Lincoln Financial Group from March 31 to April 9, 2015 among 2,273 adults 18 years of age and older across the United States. The sample was weighted to reflect the proportion of adults 18 years of age or older by gender, age, region, race and Hispanic ethnicity based on data from the U.S. Census Bureau. The margin of error is plus or minus 1.9 percent at the 95 percent confidence interval for the entire sample.

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To Weather Market Volatility, Stay Invested for the Long Haul originally appeared on usnews.com

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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