What Market Volatility Means for Your Money
2/4/2019
3 min. read
By: FCU Team
In the final quarter of 2018, interest rate and growth fears, along with geopolitical events, sparked volatility in the financial markets. For the first time since 2008, all three of the major U.S. stock indexes (Dow, S&P 500, and NASDAQ) were set to record annual losses.
And while some investors may be feeling shell-shocked after the most disappointing December for stocks since 1931, it’s important to maintain some perspective.
Financial Markets Are Complex and Unpredictable.
Our financial goals are best realized when we don’t burden these efforts with abrupt reactions to current events.
Sudden Market Reactions to Events in the News Are Common.
When you hear that the financial markets are reacting to the news once again, it should come as no surprise. We know volatile markets can be unnerving, and we are keeping a close eye on the fluctuations. More importantly, you should be watching to see if any new long-term trends emerge that would affect how your portfolio is allocated.
This Is a Moment in Stock Market History.
At times like these it’s a good idea to avoid making hasty decisions, keep the long term in perspective, and realize that these events are part and parcel of stock market investing.
What Now?
Despite financial market turbulence, economic forecasts suggest that the United States entered 2019 in a fairly strong position. Unresolved geopolitical issues (including a prolonged government shutdown) or disappointing economic reports could continue to upset the stock market in the coming months.
Even so, if you panic and flee the market during a downturn, you won’t be in a position to take advantage of growth on an upswing. And if you are investing for a long-term goal such as retirement, a down market may be an opportunity to buy more shares at lower prices. Though it can be difficult to take the headlines in stride and control your emotions, sticking to a sound investment strategy is often the best course of action.
If you’d like to learn more, keep your eyes peeled for one of our complimentary lunch and learn seminars hosted by FCU's financial advisor, Ken Toops, CRPC.
The return and principal value of stocks and bonds fluctuate with changes in market conditions. Shares, when sold, and bonds redeemed prior to maturity may be worth more or less than their original cost. U.S. Treasury securities are guaranteed by the federal government as to the timely payment of principal and interest. Past performance is not a guarantee of future results. Actual results will vary.
This information is not intended as tax, legal, investment, or retirement advice or recommendations, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Broadridge Advisor Solutions. © 2019 Broadridge Investor Communication Solutions, Inc.