As the market continues to be volatile, it can be hard to know what to do here in Frisco, TX. So here are a couple of tips you can use today:
RESIST THE TEMPTATION
Volatility can play rough with your emotions. The temptation to jump ship during a downturn is strong, but timing the market’s trendline is nearly impossible. It rarely maintains a steady upward trajectory, but is rather more like a dance: 2 steps forward, 1 step back, over and over again. What may appear to be a peak before a precipice may simply be a brief correction on the way to new highs. When things are bumpy, resist the temptation to react in an emotional way, and remember that turbulence is part of the ride.
LOOK AT THE BIG PICTURE
Short-term market fluctuations can stir all sorts of emotions and may even lead you to make unwise investment decisions. Whenever possible, step back and take the long view. Are you investing for 10, 20, or 30 years? Longer? Viable investment strategies generally outlast volatility, which typically lasts days, weeks, or months.
Numbers from the past can provide insight as well. Although past market performance cannot serve as an indicator or predict future trends, the S&P 500 has generated an average 8% annual return through 2018, since adopting 500 stocks into the index in 1957.3,4 The S&P 500 is an unmanaged index that is generally considered representative of the U.S. stock market. (Remember, individuals cannot invest directly in an index.)
So as Friso, Texas starts to open up, remember we have been through tough markets before. Just stay calm and stay safe Frisco!