TWEET AND RETREAT…LET’S HOPE THERE’S NO REPEAT
When Trump tweets, the market retreats…or so it seemed last week. The S&P 500 entered negative territory for the year, tamped down by fears of a US/China trade war, concerns over potentially rising interest rates, and the possibility for a weaker US economy in 2019. The arrest of a top Chinese technology executive Meng Wanzhou also stirred up fears. Yet, job growth continued to increase, a sign of a healthy economy - an indicator that was overshadowed in the media. We ain’t dead yet!
We were “spoiled” during the market upticks of the past few years. So much so that many investors got comfortable assuming risk with predominantly equity portfolios. But as I have told my clients often, markets rise and fall - your risk tolerance may change now that volatility is back in the markets. If you are uncomfortable, it’s time to re-assess that risk tolerance.
Keep some things in mind:
- Longer term trends are more important than short-term downticks. Staring at the markets every day is not necessary.
- Keep in mind your time horizon. If you have many years to reach your goal, you can withstand more risk than someone with a shorter time horizon - such as someone retiring next month or having a child going off to college next year.
- The media loves to stir the pot by using words like “crash” and “plunged” and “plummeted” to add excitement to their stories - often, these words are used when market corrections have not been that significant. Don’t panic - keep things in perspective.
I want to invite you to look at the LPL Research section of my website at www.capitalfinancialplanning.net for weekly and monthly market and economic commentary to keep abreast of market happenings. While I share information on social media, this page archives the stories and may be a handy reference for you.
If I can help you to navigate through the noise, please reach out. It’s what we are here for.
The opinions expressed are those of the author. Seek professional advice before taking any action in regard to your finances.
Todd A. Slingerland, CFP®
6 Tower Place Albany, NY 12203
(518) 867-4000 x105 [email protected] www.capitalfinancialplanning.net