Over the next couple of days investors will be hearing a great deal about the recent sell-off in the stock market. Some talking heads will point to the wrangling between Republicans and Democrats. Others will point to market valuation. Still others will point to the rise in interest rates since the close of last year.
It is somewhat irrelevant who is correct. What is more important is that you have your assets allocated according to your objectives. Your long-term capital needs to be in the areas that will work for you over the LONG term.
Certainly, a 660+ point decline in the Dow can be a bit unnerving. However, it is important to note that this amounts to approximately 2.50%. Not historic by any measure. Be prepared for the click-bait headlines that you’ll see. In fact, one just appeared on our computers (“Dow Plummets more than 670 points, capping worst week in more than 2 years”). It is important to note that since that week – Brexit during the latter of June 2015 – stocks have risen precipitously.
Here’s what we recommend you do:
1) Keep in mind that pullbacks/corrections are part of investing. You can’t have the good times without some corrective action periodically.
2) Keep an eye on your objectives. Don’t’ be sucked in by the noise.
3) Raise some cash.
4) Thank heavens for your less volatile fixed-income funds.
5) Stay diversified.
6) Don’t panic.
7) Enjoy the Super Bowl.
Please note that all data is for general information purposes only and not meant as specific recommendations. The opinions of the authors are not a recommendation to buy or sell the stock, bond market or any security contained therein. Securities contain risks and fluctuations in principal will occur. Please research any investment thoroughly prior to committing money or consult with your financial advisor. Please note that Fagan Associates, Inc. or related persons buy or sell for itself securities that it also recommends to clients. Consult with your financial advisor prior to making any changes to your portfolio. To contact Fagan Associates, please call 518-279-1044.