These are volatile times for the markets. The wild swings we've seen in the last few weeks have left investors wondering where they should put their money. The economy -- which was forecast to slow down in 2020 even before the novel coronavirus pandemic -- could slow even further depending on the impact of COVID-19 response on consumer spending.

It's all very concerning, but it's important to remember that time is on your side. Over the long-term -- through the 2001 dot-com bubble, the 9/11 terrorist attacks, the housing crisis, and the Great Recession -- the S&P 500 has a compound annual return of 10% over the last 30 years, 6% over the last 20 years, and 13.5% over the last 10 years ended Dec. 31, 2019. Patience is important. But that doesn't mean you shouldn't ask questions and possibly adjust your strategy based on the current conditions.

The best bet is to talk to your financial advisor and be sure to ask them three key questions during that discussion.

An image of an advisor going over an investment statement with a client.

Image source: Getty Images.

1. Should I reassess my risk tolerance?

February marked the 128th straight month of economic expansion, dating back to June 2009. This run smashed the previous record for economic growth that occurred between 1991 and 2001. During this time frame, the S&P 500 has grown about 13.5% per year, which is higher than long-term averages.  

Just as markets change, so does your risk tolerance, or the variance in returns that you are willing to tolerate. A higher degree of risk tolerance means you are willing to withstand big market swings to capture the long-term returns that growth investments provide. A lower degree of risk tolerance means you want steadier returns that don't fluctuate wildly based on market conditions or underlying issues. Your risk tolerance should be based on a number of factors your advisor can explore with you, but if you are closer to retirement, or need money for major expenses, like college, you may want a more conservative risk tolerance than perhaps younger investors might.

2. What is the outlook for the economy and markets?

Most financial advisors have access to projections from their company's chief economists and portfolio managers who live and breathe the markets every day and watch where they are going. Based on what their experts say, do they expect a bear market or a recession on the horizon? That, in turn, could lead to changes in interest rates, which may impact your investments. The Federal Reserve made an emergency rate cut on March 2 after one significant coronavirus-fueled market sell-off, reducing the rate 50 basis points to 1.25%.

Economists now expect another rate cut in March, as markets continue to sink lower. Economists also see a recession as more likely this year, raising the chances for one from 23% last month to 30% in March, according to a Reuters poll.

These discussions, along with an assessment of your risk tolerance, will help inform your asset allocation decisions. If you have a lower risk tolerance and expect a slow down in equity markets, you may want to increase the percentage of holdings in more stable investments.

3. Is this a buying opportunity?

When markets go down, it can be a great opportunity to buy good, long-term stocks at lower prices. Microsoft (NASDAQ:MSFT), for example, has dropped about 9% in the last five days, but remains a great company and a good buy. Likewise with Apple (NASDAQ:AAPL), which has fallen about 8% in the past five days but has great long-term potential.

In a larger portfolio, like a mutual fund or ETF, it may be a good time to allocate some assets to funds that capture these undervalued stocks with solid fundamentals. Ask your advisor about your best options. 

Markets are uncertain, so it's never a good idea to try and predict where the market is going. But a good long-term investment strategy should be informed by many factors, and the more you know, the better positioned you will be to meet your goals. In these times, it all starts with asking the right questions.