“Be fearful when others are greedy. Be greedy when others are fearful.”
Over the last month or so the stock market has had a lot in common with the classic Cyclone roller coaster at Coney Island: lots of bumpy ups and downs, stomach-churning moments, and unpredictability (and all without the cotton candy).
For the last two years, we enjoyed what seemed to be endless market gains, until the recent pullbacks made us collectively remember that markets don’t always go up. But that certainly does not negate the fact that, over time, markets have provided long-term potential to grow wealth.
When you have a well-diversified portfolio that is built to reflect your comfort level with risk, you can ignore the pundits and other media noise. And remember that we are always here to answer questions, and to offer reassurance and perspective.
Seeing is believing. This video shows how $1 invested in the total U.S. market grew from 1927-2017 along with the headlines in Time magazine. You can see that even major events like wars and recessions historically have had little long-term effect on the market’s continuing growth.
For an experienced investor, the recent market gyrations can provide reflection and maybe a chance to rebalance certain asset classes that may have gotten out of sync with a risk tolerance profile. For the less initiated, it can be an insomnia-laden fear-fest, filled with less-than-rational reactions. This article asks and then answers six questions that can help investors keep calm amidst volatility.
Is your brain sabotaging your financial success? Even in the best of times, investors may become over-exuberant and ignore their chosen risk tolerance. And during downturns, they might make poor decisions based solely on emotions. Learn how mind over matter can help you master your cognitive biases for a potentially better— and more enlightened — financial future.