How to Worry Less

by | Sep 21, 2015 | Economics, General Interest

Are you concerned about the how the recent market correction will affect your investment portfolio? I came across an article today from one of our investment partners, The Hartford Funds that helps put the recent events in perspective.

A stock market correction is defined as a downturn of an index (like the Dow Jones Industrial Average, or the S&P 500) of at least 10%. Corrections are common occurrences in a healthy economic environment.

While no one likes to see their investment portfolios correct, this article just might make you LOVE a market correction.

To jump directly to the Hartford Funds article ► Click Here

Here are three take-aways from this piece:

Develop and Stick to a Sensible Plan

The article makes the point that some investors try to “time the market” by transferring their investments to cash when the stock market corrects, and then back into their investments when the market seems to be rising again.

Related ► Richard’s Open Letter Addressing the Market Correction

But few investors actually make money by timing the market. A long term investment strategy should already take in account periods when the stock market corrects. Rather than “timing the market”, we should focus on “time in the market”.

Be Greedy When Others Are Fearful

This is an old bromide that is said to be attributed to Warren Buffet, whom some call the “Oracle of Omaha” for his investment acumen. The idea here is that investors should consider buying into a correcting market instead of selling out of it. Investing while stock prices are low is akin to buying department store merchandise while it’s on sale.

Failing to Plan is Planning to Fail

You should discuss your concerns about the stock market with your advisor to help ensure that your investment strategy is consistent with your goals and objectives.

If you don’t have that kind of relationship with your adviser, I’d be pleased to help. Please contact me at (800) 236-9549 for your free, no-obligation second opinion review of your investment portfolio.

To read the Hartford Funds article ► Click Here

 


Citations
1-http://finance.yahoo.com/news/warren-buffett-is-the-world-s-greatest-investor–but-doug-kass-is-still-short-berkshire-161026844.html
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