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As the stock market see-saws through policy uncertainty, it’s understandable to be concerned and perhaps even to feel uneasy. In fact, you wouldn’t be human if you weren’t feeling the fear—the challenge becomes not acting on it. Please remember that market fluctuations are a normal part of the investing experience. While volatility can be unsettling, it’s essential to remember that time in the market, not timing the market, is key to long-term success.
Focus on the Long Term:
Your 401(k) or company retirement plan is meant for long-term saving and wealth-building. As Vanguard founder Jack Bogle always advised, it’s important to stay the course. The potential for higher long-term returns from stocks comes with inherent risk and occasional negative periods. Historically, riding out the market declines has led to better outcomes. Stick to your strategy and focus on the long-term.
Avoid Emotional Reactions:
It’s tempting to react to short-term market movements, but emotional decisions can harm long-term performance. Markets react to short-term news, often driven by sentiment rather than the long-term value of your investments. Trying to time the market has proven to be ineffective—remember, no one can predict the future.
Flip the Narrative:
Instead of panicking, consider that market downturns can present buying opportunities, allowing you to purchase the stock of companies at lower prices. Stay invested and keep contributing regularly to take advantage of dollar-cost averaging, where you buy more shares of company stocks when prices are lower.
Stay Focused on Your Goals:
Market declines are part of achieving long-term growth in stocks. If you’re nearing retirement, a long-term perspective is still important—avoid panic selling, which could lock in losses right before you need the funds. Hopefully, your asset allocation was previously adjusted to reflect your shorter timeline and lower risk tolerance.
Seek Help—Reach Out to Us:
Consider reviewing your investment selections and asset allocation to ensure it still aligns with your risk tolerance and retirement goals, which should provide you some comfort and help you stay the course. Please know that we are here to assist you if you have any questions or concerns. We encourage you to reach out for guidance and support.
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