Our topic today is critically important to your financial well being. Far from exaggeration, how you act (or react) in times where stock values fall will have more to do with your financial life than any other decision.
If you liked your investment allocation (between stocks and fixed income) a couple weeks ago, has anything changed in that short period of time? Likely not. The wonderful processing mechanism that we call “the market” has simply decided it is time for a breather. Markets don’t move only in a single direction…they move up AND down.
Investing for the Long Term
If you owned a home 6 or 7 years ago, did you panic at the first movement downward in prices? Probably not. A house is a long term investment (if it is an investment at all), and has to be viewed through that lens. Of course another factor may have stopped you from acting – the relative illiquidity of real estate. You can’t necessarily find a buyer quickly. Many who wanted to sell a few years ago simply could not find buyers.
Because of the millions of stock market investors world wide, there are both buyers and sellers ready to act on any given day. For every panicky investor, convinced that the world is about to end, there is a confident one on the other side of the trade who wants to buy what you have to sell. Sure, just like at the grocery store, the prices of various items may move around from time to time based on a host of factors.
Invest – Relax
There are always an infinite number of worries, problems and issues that cloud the future. We are able to choose how we process these inputs. Remember, our approach does not depend on forecasting economic events in order to achieve good investment outcomes. Our focused philosophy allows clients to invest, then relax. Ready for a real conversation?
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