The last week has brought extreme volatility back to the markets. We’ve had several years where the market was going in one direction, and that direction was the one we like, increasing on a regular basis. In fact, it’s been two years since we had our last market “correction.”
You might be asking yourself if it’s time to get out of the market. Of course, the answer to that is as always, “It depends.”
If your investments are allocated in a way where you’re not going to have to invade your equity accounts for several years, my answer will be stay the course. If you need your equity assets sooner than that, you’ll want to talk with your advisor.
One of the new solutions we’ve brought to our wealth management business is a program called Income for Life. This program helps you think about establishing separate accounts for cash, bonds, and stocks. When you do this, there is a chance you’ll be able to stomach the ups and downs of the markets more easily. If you would like to check out our Income for Life program, click here to see some information about it. If, after that, you would like to have a conversation with us about Income for Life, just hit return and we’ll set a time to talk.
My opinion of the market
If you were to ask me what you should do, I would advise you to stay the course. Yes, the market is volatile right now. That doesn’t mean you should sell. It doesn’t even mean you should pay a lot of attention to what the market is doing.
Markets go up, and markets go down. I want you to understand this and not to think the world is coming to an end. This doesn’t mean the markets can’t go down further, but if history is any teacher, markets will spring back, and if you’ve gone to cash, you’ll have lost your money and not just had a short-term paper loss.
No one can predict what the markets will do on a short-term basis. If history has anything to teach us, long-term the markets will be fine. I have no idea what will happen this coming week, but I’m reasonably confident that long-term we’ll be fine.
Please don’t take my comments about the markets as a personal recommendation. You should talk with your own financial advisor before making any changes in your investment portfolio.