Over the last couple of weeks I just have to laugh. I know it’s not funny to see the market like this but it is incredible to see the swings it is under going. We are seeing market swings in the range of 500 point or more and mostly in the down direction. That is what is incredible I have never seen volatility like this ever.
That Being said the sky is not falling, if you are invested right. I have talked to a lot of my friends who have said to me this is a bad time to be in the market. No, No, No. This is a great time to be investing if you are allocated properly. The people that have lost money are those who are not allocated properly.
If you are younger this is a great time to buy in because you have the longest time to see your investment grow. Give this market another 2 to 5 years and we will see it bounce back. If you are young enough you will go through a number of periods like this.
For those heading into retirement it behooves you to be in a more conservative asset allocation such as bonds cash and treasuries. Those who have done this at this time have not felt the impact as those who are currently in stocks.
The main reason now is a good time for an investor to invest is dollar cost averaging. It basically is a sale on stocks everything is marked of more than 40%. Will it stay that way probably not. So if you buy a bulk of stocks at 50% off when it goes up you are going to be in an enviable position. Because your sale prices are now replaced with full market prices and your investment has just increased.
So never fear the doom and gloomers are always out in force at this time but the tried and true strategy’s always work when it comes to long term investing.
Brice Hogan
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