When the Market Falls, Don’t Panic!
With the recent volatility in the stock market so far this year, investors are seeing major swings in their retirement savings, both up and down. Even with the recent recoveries and interest rate cuts, our markets as a whole are down about 8% for the year, as most investor portfolios reflect. Because of the recent strains to our markets, we feel it’s important to remind investors not to panic!
Buy Low, Sell High
Everyone knows this is the ultimate goal when it comes to investing. Now, more than ever, should people be reminded of this. When the market takes a southern turn, it’s not the time to start selling in fear of losing money. In our opinion, unless you are investing for the long-term, you’re not really investing, you’re gambling. Constant trading, especially for those that are not day traders by occupation, face tall odds of succeeding. Instead of panicking when the market slows, get excited as things are on sale! See these swings as buying opportunities, even if you are one that only buys incrementally with your employees 401(k).
Your Investments Don’t Love You Back
I confess, I have been guilty of checking my stocks daily to see whether they have gone up or down. Although this kind of behavior makes it easy to become emotionally attached to investments, (not a good thing) it’s understandable, because of the amount of time some put into investment decisions. Try to come to peace with your investment decisions, knowing they are going to go up and down. Prepare yourself to ignore the panicked feeling of selling when your fund or stock starts to dip. No matter how emotionally attached you are to your investments, we guarantee they do not love you back. Try to stop checking up on them all the time like your kids, and take confidence knowing that whenever your retirement rolls around whether it’s, five, ten, or fifteen years down the road, the market will have recovered, dropped, and recovered again.
We can’t control the market, but we can control our emotions and patience will prevail. Do not panic during the next couple of years, which is predicted to enter a possible recession. Think rationally, and take advantage of what this market truly is, an opportunity. $
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