We understand your concerns. After all, most of us are investing in the stock market for our most important life and financial goals. We need the stock market to perform positively for the long-term financial independence, financial stability of ourselves, our families, and our communities. In times like this, it is helpful to remind ourselves about the basic principles of stock market investing.
- The stock market is a marketplace where buyers and sellers come to negotiate prices, and purchase or sell investments – mostly in publicly traded companies.
- Because we live in a global economy where capitalism rules, and information (and mis-information) spreads in seconds, the stock prices move often and daily in reaction to news, political events and other factors.
- Stocks do carry more risk, and therefore more reward potential.
- A stock is an ownership share in a company. Not every company increases in value over time. That is why it’s good to own many stocks in many different types of companies. That’s diversification!
- Stocks are good things to invest in for long-term needs, such as retirement or other goals that are 5+ years down the road. History shows that investing in a well-diversified stock portfolio increases in value over long-periods of time.
Stay calm and focused on saving for long-term goals. We expect investing in the stock market to be a bumpy ride in the short term. Now is NOT a good time to make drastic changes in one’s stock market portfolio. This recent NY Times article may help give you more reassurance. We’ve also written in the past about focusing on what you can control as an investor.
We also encourage you to reach out to us if you need a professional opinion on your overall investment plan and what approach to take. Click here to book a complimentary virtual planning session now.
Please note that our office is closed at the time to all visitors. However, our team is working remotely using secure networks and continuing to provide financial planning consulting and daily maintenance on client investment accounts. We will be available for telephone calls, computer meetings and e-mail communications, as time permits. If you want to send us sensitive documents (ex. docs containing Social Security numbers or account numbers), please contact us and we will direct you to share these documents through our secure file sharing portal.
Nicole Middleton Holloway, CFP®, CEO