Volatile markets: Don’t rely on headlines for guidance on when to invest
Falling markets and drastic headlines can tempt individuals to abandon their long-term investing plans. Their thinking might go something like, let’s wait until it’s over, hoping to catch the market at its lowest point before buying in. Or in rising markets, maybe they seek to sell most of their holdings near the peak.
Headlines shouldn’t dictate when you invest; they may not reflect what’s actually happening in the market.
A recovery typically involves many episodes of gains and losses that can obscure an overall upward trend.
Just a few trading days can be responsible for the largest gains during a recovery; being out of the market can mean missing out on the most profitable periods.
Don’t rely on headlines for an all clear to invest
Hypothetical $1 million investment in Standard & Poor’s 500 Index at pre-crisis peak, from market bottom in 2009 to breakeven in 2011
It’s understandable to have concerns about market volatility and its effect on your portfolio. The situation in the markets is certainly different this time. However, so far, it follows a pattern we’ve seen many times before and have successfully navigated over the years. Bottom line: The “right time” to invest is usually now, whatever the markets’ performance or news headlines might be. By all means, if you have questions or concerns about the plan we created to help you reach your financial goals, please get in touch.
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