Being Smart with $$ -- Stocks are Down. Now What?

Stocks are down.  Now what?  First of all, to put in perspective, the US market is really only down about 5% for the year (including dividends.)  It’s easy to feel whiplash when the market is so volatile but if you had the TV off for 2018, you’d look today and be annoyed that you lost 5% though you wouldn’t think of this as the 1920s all over again.  And if you look at the average return over the last 5 years, you’ve realized better than 8% annual returns.  But the question is: what’s next?  We can’t go back to early October and sell at the artificial highs.  So do you sell now when the market is at a much cheaper level than October 1?  And while cheaper, is it cheap?  Nobody knows the answers to these questions but many have opinions.  It seems that a few months ago when the market was high every analyst predicted the market would scream higher.  Now the market has fallen and every analyst seems to predict more declines.  So often these opinions are late to the party.  Every investment decision must start from today and yesterday’s results don’t matter.  Historically speaking, most families that have achieved long term financial success did so by tuning out the drama on the business channels and holding steady through volatile times.  Those that timed the market, more often lost the bet than won it.  Don’t keep more in the stock market than is appropriate for your profile.  But sit tight and remember your stock portfolio is supposed to provide for your needs in 2030 or 2040, and not in 2018.

Larry Pike, CFA

Client Priority Financial Advisors LLC
www.clientpriority.com