Apr 25, 2019
Markets Are Reaching Records (Again).
Ignore the market noise and invest for the long haul
Markets are setting record highs—again.
And as they do, now might be a good time to make sure you have your investing priorities in order. Why? Markets tend to move around a lot—they can go down as well as up. And the movement of markets in the short run is less important than achieving your long-term financial goals.
Read on and we’ll explain.
So what happened?
Similarly, on the same day, the Nasdaq jumped 105.56 points to 8,120.82, beating its record high of 8,109.69 on August 29, 2018, according to AP.
The Dow Jones Industrial Average (DJIA), is also close to the record it achieved last year.
Generally speaking, investors believe the economy is on strong footing, according to reports. Here are a few reasons why:
- Uneasiness about trade tensions between the U.S. and China, the world’s two largest economies, have reportedly moderated as the two sides work towards a resolution.
- Investors may be reacting to the March decision by the Federal Reserve to hold off on increasing interest rates. Higher interest rates can have a negative impact on business.
- Solid corporate earnings from companies including Coca Cola, Twitter, and Procter & Gamble may also be playing a role, according to sources.
Volatility is normal
Markets go up and they go down, it’s a natural part of investing called volatility. Volatility is essentially the tendency for stocks and markets to fluctuate. You can find out more about volatility here.
It’s important to realize that the last decade, where we’ve experienced fairly steady market gains each year, hasn’t been normal. We’ve been in the longest bull market since the one experienced in the decade after World War II. At some point that is likely to come to an end.
Remember the Stash Way
It’s easy enough to feel great about investing when stocks and stock markets are climbing. But when you see your portfolio start to head south, there’s often a strong temptation to cut your losses and head for the hills.
When markets fall, the temptation might be to sell your holdings. We get it. Losing money is no fun. But by selling when markets drop, you could end up locking in your losses.
Instead, we recommend investing for the long haul. In fact, it’s part of our investment philosophy, called the Stash Way, which boils down investing into three core principles. These are investing regularly, investing for the long term, and diversification.
By investing regularly, sometimes you’ll be putting money into markets when they’re up, and sometimes you’ll be investing when they’re down. Over time, the highs and lows are likely to balance themselves out.
You can find more about the Stash Way here.
Don’t pay attention to the short-term market noise. Keep on Stashing.