25 Sep 2015 Dow Plunges Triple Digits
How often have you seen a news headline that looks something like this: “Dow Plunges Triple Digits?” Makes for a great headline, but a better way of saying the same thing is, “Dow Ends Down 0.6%.” Not quite the same attention grabber, is it?
Let’s be honest, times of market volatility are challenging for all of us. No one likes to see their account balance dropping sometimes by thousands of dollars per day. But the last thing we need is to have the media blasting us with attention-grabbing headlines designed not to inform us but to stir up the most virulent of our emotions, which can make bad decisions seem prudent.
So what can we do when we see those scary headlines? Here are some thoughts:
- Turn off the TV (at least CNBC.)
- Remember that your portfolio is less volatile than “the Dow,” which consists of only 30 stocks and no bonds.
- Look at your account balance less often–maybe try for once a month versus once a week, or once a week versus 12 times per day.
- Give your advisor a call. At Beacon, we’re just a phone call away and we’d be happy to talk through any questions you might have.
- Have a plan and stick with it. Odds are the current market volatility hasn’t changed the long term probability of accomplishing your dreams and goals.
- Remember the wisdom of Ben Graham, the father of fundamental investing. The market is a voting machine in the short run and a weighing machine in the long run. Click here to read more on the topic.
- Focus only on what you can control.
- Remind yourself that short-term outcomes are not the same as long-term success.
And remember, while market volatility is difficult and we’d rather not experience it…
This is normal and expected.