Market Volatility & Your Strategy
With the recent market declines, U.S. markets are now in an official correction (a 10% decline as opposed to a bear market, which is a 20% downturn). A drop in the markets can initially seem scary; however, those with an established investment strategy can have a different perspective. At times like these, experts like Warren Buffet advise investors to stick with their strategy and, if cash is available, to take advantage of drops in the market.
STRENGTH IN STRATEGY
An investor’s primary concern should be the suitability of their investment strategy, which comprises both the time horizon and the risk tolerance of the investor. Fundamentally, we do not believe market movement is a reason to make a strategic change. If anything, it may be an opportunity to reassess risk tolerance to see if allocation adjustments are necessary.
KEEP CALM! IT'S A BARGAIN!
While market corrections are unpredictable, they are perfectly normal. From a long-term perspective, at these times, the market is going “on sale.” Those who continue to invest in the markets on a regular basis (Dollar Cost Averaging) will be purchasing more shares at a lower price.
Otherwise, stay focused on the long term.