Since 2017 there have almost been nothing but up days in the stock market. Obviously, times like these are better than when the market is going down. But quite often these are the times when investors get greedy. They forget how the markets work and believe that this time, most definitely, trees will continue growing to heaven.
I’m not here to break your spirit, but I will guarantee you, markets will see a downturn. I have no idea when, but if history is any indication we will definitely see one and I want you to be prepared.
If you are one of our clients, we prepare for those times. We take advantage of consistent re-balancing, as well as, build a globally allocated portfolio that is prepared for moments when stocks decline. Our retirees are also taken care of because we are not dependent on the daily market gyrations of the stock market for your income.
But when the market goes down here are a few things you need to do or not do:
- Keep your fears in check and understand why you are invested in the market to begin with. Most downturns in history are merely blips on a radar screen.
- Play dead. If you are allocated like our clients, then don’t worry about it. Its like meeting a grizzly in the forest. By staying calm you keep from becoming the bears lunch. Remember bear markets are a lot shorter than bull markets.
- If you are afraid then it means that you don’t have a plan, and you have no idea what you are doing. Take the time to seek out a professional to help. Evaluate your asset allocation to meet the returns and risk you are more comfortable with.
- Turn off the TV and log off your account. Its going no where in the short-term. There is nothing to see.
- If you are a saver ……. Buy more. I think you know the drill with that.
With all this being said, I am sometimes a realist. Even though I understand the markets and believe that overall equities have created more wealth than anything else in the planet, there are some folks that are utterly afraid. If that’s you then stay out.
Understand that the market is just a tool and if you don’t like it there are other tools we can use that hopefully will allow you to work within your objectives and sleep better at night.
