All in Investing
You’ll often hear folks like me say that investors or markets “hate uncertainty.”
And that causes market drops and volatility.
Why do we hate uncertainty so much?
And how can we look past initial reactions and embrace the power of uncertainty?
I made a short video discussing 3 secrets to embracing the power hiding inside uncertainty.
First, what is a bear market? It’s when stocks have dropped more than 20% from their last peak.
So yes, in some sectors, we are in a bear market territory.(1)
But, as of this writing, the broader S&P 500 has not entered a bear market. It’s possible it will, especially in this environment, but it hasn’t yet.
So, let’s remember goals-based investors with a financial plan are not day traders.
We’re long-term investors, and the day-to-day and week-to-week gyrations aren’t as important as what happens over years. What’s more important are the values, objectives, and time frames that have been laid out in your financial plan, in advance. If the financial plan doesn’t change, or your personal goals don’t change, then the investments don’t change.
Here’s a quick chart showing just how common big market drops are:
Bull Market and Bear Market Quiz!
For a bear market to begin, do stock prices have to fall by 10%, 15%, or 20% from a recent high?
Do you know the answer off the top of your head?
If you said 20%, you’re right!
What do you need to know about how markets performed last quarter (and what could happen this quarter)?
We broke down what you need to know about markets and the economy into a five-minute read.
Keeping up with markets and the economy is a big part of my job, but I want to share some key takeaways and what I’m watching for in the months ahead.
What’s the number one mistake investors make when markets decline?
Selling in haste.(1) It’s an emotional reaction to the surprise of a correction.
And it usually trades one problem for another—it replaces fear with seller’s remorse.(2)
You can avoid all of that if you know the facts about market corrections.
This month’s Visual Insights Newsletter highlights what you need to know about market corrections, so they don’t rattle you.
After weeks of headlines about the coronavirus outbreak, markets have been caught in a volatile pattern of surges and retreats. Here’s what you should know:
Why are markets so volatile?
Disease outbreaks are hard to predict and come with a great deal of uncertainty that can make investors nervous—particularly after a period of record market gains.
As the epidemic spreads beyond China, investors worry that it could cause serious disruptions to trade and the interconnected global economy.
How to assess your current investment situation whether you're 10 years away, 5 years away, or already in retirement
The 3 or 4 critical questions you need to ask yourself that will determine what you should do next (if anything)
Your level of confidence with your current investment strategy and what you can do about it
In August, I was interviewed by Andrea Coombes at NerdWallet.com to get my take on the pros and cons of investing in taxable brokerage accounts.
Read the article here: https://www.nerdwallet.com/blog/investing/investment-account-becoming-popular/
Here are the two things we know about bear markets:
We can’t predict when they’ll happen, nor can we predict what will cause them.
We can only figure out those things in hindsight.
That can be unnerving to consider. But here’s the good news.
We can get a lot of peace of mind just from knowing the basics about bear markets—and what to do in light of that.
This month’s Aquila Wealth Newsletter shares some important insights about bear markets. Click here to check it out!
