Recent Stock Market Volatility Concerns

Earlier this week the stock market had its first major loss in over a year.  The Dow decreased 8.5% and the S&P 500 fell 7.9%¹, these losses wiped out the gains since the beginning of 2018.

Corrections in the market can be healthy along with good and bad volatility.  If the volatility makes you uncomfortable don’t expose any amount of money that you are not willing to lose.   If you have a retirement plan with an adviser I bet the plan includes market fluctuations; which allows you not to worry about day to day current events.

Transition

If you are in transition from an investment plan to a retirement plan (getting ready to retire) Re-evaluate your goals and objectives with your adviser.  What are the goals in retirement you would like to accomplish with this money.  You may need a sustainable income plan instead of a variable plan.

Time

Unfortunately we cannot reverse or create time.  In retirement you don’t have as much time left for growth.  Evaluate how much risk you’re willing to take.  When market corrections occur you can’t make a permanent decision that can have long term effects.  Stay true to your plan and you may be surprised that the market correction could be healthy for long-term growth.

Motive

Along with time, evaluate your motive. Does your motive to invest in the stock market a positive plan for your retirement money? Does your motive have enough positive aspect that it outweighs the potential risk?

Exposure

When dealing with the stock market, it can go both ways. It is an opportunity that you willingly choose to follow, choose to be exposed to, and will have to let it run its course regardless of a good or bad fluctuation. Having a source of sustainable income is one way to ensure you still have money to fall back on in the case of the market declines.

Sources:

1 – Martin, Ray. MSN Money. February 7, 2018. There’s no reason to run from the stock market. Accessed on February 7, 2018.

 

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