Is It Time To Pull Out Of Stocks?
After Thursday’s big sell-off day, many investors are running for the hills and taking their money with them. However, making an emotional decision to pull out of the markets right after a stock market mini-slump, is not always the best idea. Even though Thursday was the worst day of the year thus far for the stock market, advisors are still encouraging their clients to stay the course and to not make any rash decisions at this point.
Stocks Are Volatile, Stay The Course!
There’s no question that stocks are, and have been volatile. One worrisome economic headline is enough to send the markets plummeting. In this case, recent discussion of the Fed pulling back on Quantitative Easing was enough to create some major drama in the markets. However, in today’s market it’s important to keep your eye on the long-term goal. If you’re primary goal is saving for retirement, than you’re in the money game for the long-haul. Yes, the Dow Jones may have dropped 4% on Thursday, but year-to-date it is still up by 13%. Your best bet in this scenario is to sit back, refuse to panic, and ride it out. Back in 2008, a lot of people lost a lot of money when the market slumped. However, it was those who stayed the course who ended up being more prosperous in the long run, compared to those who panicked took a major hit and invested the leftovers in bonds or other “safe” investments.
Choose To Be A Panic Free Investor and Stay The Course With Stocks
Rather than succumbing to panic and locking in a final loss by pulling out of the market now, give it some time to rebound and then speak to your financial planner about your next step. Keep in mind, that from 2003 to today, those who stayed the course and continually invested in their 401(k) plans in spite of market volatility are currently up 17% from that time. Those are some huge gains! In other words, if you pull out on an emotional whim, you lock in the loss. If you wait it out, you stand a chance to catch it on its way back up and then have the ability to make a decision on your investment without the influence of emotion.
For more information on the stock market and on whether you should buy or sell in today’s current market, speak to a Redhawk Wealth Advisor near you today.