It's Back... "Volatility"

August 29, 2019

This month I’m responding to a reader that is concerned about the recent market fluctuations. They basically asked what they should do with their portfolio now?

The stock market has been on an epic run, with the Dow racing even higher in 2019. People have gotten used to seeing their 401(k)s flourish. The recent wild gyrations can be scary for individual investors, particularly those that haven't been investing very long, and aren't used to seeing stocks go anywhere but up. But that doesn't mean you should be spooked out of getting into the market.

No one likes to lose money. But it's important to take a long-term view and not make decisions in short-term volatility. Although a massive market drop can be attention-grabbing, it can also present a buying opportunity.

More tangible assets like real estate can be appealing for some people and help with diversification, but they likely won't bring the returns that stocks can over the long term. Many experts see the key to investing in the stock market is to have a plan: Calculate how much you can afford to invest, set a goal and timeline and determine your risk tolerance. The earlier you start investing, the more time your money has to grow. If you are saving for something that's still decades away like retirement -- it's easier to ride out stock market downturns.

For those already in the market and worried about their money, now is a good time to evaluate your portfolio and make sure you're still comfortable with your asset allocation. Stocks are more volatile than bonds but tend to bring greater returns.

Keep in mind that a 5% drop in the Dow doesn’t necessarily mean that your portfolio also took the same-sized hit. If you are properly diversified, your portfolio is not doing what the market is doing.

If you have questions or would like to know more, you can contact me Frederick D. Shows at (864) 520-5061 or Fredreick.Shows@GoodLifeFA.com. Our offices are located in downtown Greenville at 101 North Main Street Suite 805. You can also like us on Facebook at https://m.facebook.com/FrederickShows.GLFA/. Our website is http://www.goodlifeupstatesc.com/ or linkedin.com/in/frederick-d-shows-8431a1a7

See you next month!

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. No strategy assures success or protects against loss. Investing involves risk including loss of principal.

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