Is it Time to Panic

Recent weeks have brought with them rough and rocky times relative to the stock market. Many investors are feeling the anxiety and fear that comes along with these unstable market conditions. If you are one of my clients you have one of the most prudent and well diversified portfolios imaginable.

What we are experiencing in the market right now is nothing new – it is simply market volatility at work. It is the downside risk that we all take for being in the market. Accepting this volatility is what makes investing so rewarding in the “good times.”

I know you have heard this all before, but sometimes it bears repeating…Market prices and movements are random. No one knows where the next 20% move will be, but the next 100% move is always up.



Encouraging you to sell now (or change objectives, or any type of market timing) would compromise your opportunity for long-term success. Remember that large wire houses and online brokers make these recommendations so that they can profit from increased trading induced by the fear created with the deep pockets of their marketing machines.

The reason you have an investor coach is to help you see your way through these uncertain times. It is your coach’s job to help you do the right thing and keep you on the best course for long-term investment success.

The right thing to do right now is to remain disciplined and rebalance as we have always done. Stocks are a long-term investment; short-term market fluctuations are meaningless in the grand scheme of investing.

Let me make a comparison. If the value of your home dropped due to a bad real estate market, you wouldn’t sell it at a loss just because of a temporary market drop. The same should be true for your investment portfolio.

When you are in the middle of down markets like this… it feels like it will never end – but it will.

This too, shall pass.

Investors who stay the course, remain diversified, and “tough it out” realize the rewards of rebounding markets.

To Do’s for the Prudent Investor:

• Turn off the hype. Ignore the messages of chaos and panic thrown at you from the media circus.
  
• Focus on the long term. Your goals and investment objectives for the long term have not changed… your portfolio is designed to weather market storms like this


• Attend an Investor Education session with your coach… it will make a HUGE difference in your confidence and understanding of what is happening.
  If you have questions or concerns, call your coach; he or she will help you do the right thing (which may be nothing at all).


• Trust in the process. You are invested in 10,000 companies in 39 countries… you have incredible diversification which is designed to protect and preserve your portfolio – even in volatile and turbulent times.
  

I have no idea when the market will turn or change. I am confident, however, that the market will do exactly what it has always done, and investors who are diligent will reap the rewards that historically have followed down periods.

We will do everything we can to help you understand and embrace these wild and free markets, so that you can gain all rewards inherent in the system.

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