The story regarding the market right now is that domestic stocks might be overvalued, GDP growth has slowed and earnings have slowed (partly to blame of a harsh winter analysts say). CNBC and some media outlets are suggesting a market correction, often times the immediate reaction is to try to avoid a market correction. It's easier said than done, as this slide implies market timing is very difficult and usually results in missed opportunities. Study the slide below!
Above is a slide from JP Morgan's Guide to the Markets 2015 Q2 edition.**
The biggest challenge is the highlighted box above stating "Six of the 10 best days occurred within two weeks of the 10 worst days." This is why market timing is so difficult, many investors struggle on when to reenter the market after a dip. Studies show that often times investors are better off weathering the storm. If you are investing for the long haul remember volatility is part of investing.
As always if you have any questions please email or call me.
You can view your performance reports from Albridge at www.mainaccount.com/ifg. If you have NOT registered recently you will need to go through that process!
1. Past performance is not indicative of future results.
2. Diversification does not guarantee profit nor is it guaranteed to protect assets.
Remember financial markets go up and down, stay the course and you'll do fine!
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When markets go down:
Invest more! When the market declines it's a good time to increase 401k contributions and/or put cash to work.
Don't Panic! When markets go down people's natural reaction is to panic and change things. If you have a good allocation and financial plan weather the storm.
Market Performance 2015*:
1.0% S&P 500
4.3% Russell 2000
5.0% MSCI EAFE
2.3% MSCI Emerging Markets
1.6% Barclay Bond Aggregate Index
Data from JP Morgan "Market Insights"
*Year to date as of 03/31/2015