By Contributing Writer James L. Marshall, Jr., Financial Advisor, Financial Educator & Author
In the words of the world’s most lovable fish Dory from the Disney movie Finding Nemo, “Just keep swimming! Just keep swimming!”
These are nerve-racking times for investors. The stock market is up one day, and down the next three days! This is the kind of uncertainty and volatility that makes some investors sell their stocks and put all their money in a bank money market account.
“History doesn’t repeat itself but it often rhymes,” as Mark Twain is often reputed to have said.
Well, do not despair. We have been here before, and as a matter of fact, what we are witnessing today is the natural order of things. Water will always find its level, and stocks will often reveal their true value.
This pullback or sell-off in the market is effectively pruning back a lot of the overgrowth we have had in the stock market. This is the arrival of the check after a few years of irrational exuberance and a Go-Go mentality regarding the stock market.
So, don’t panic sell, or try to time the market. Embrace the swings by taking advantage of this opportunity to buy some good companies at lower prices. Consider keeping 50% to 60% of your portfolio in safe or guaranteed holdings.
Make sure you stay true to your risk tolerance and manage for the growth you need; not the maximum you can get. And the best way to know this information is to establish and maintain a comprehensive financial plan.
Review your plan, rebalance your investment portfolio as needed, and make sure you are maintaining the proper levels of cash reserves.
And remember to keep building wealth. Peace!
James Marshall is a registered investment advisor registered in Texas and Kentucky. He can be reached at James@Marshallyourmoney.com. Visit him on the web at Marshallyourmoney.com.
