Over the last few days we’ve seen the market pull back from its recent highs, on the news that maybe the economy is cooling off a little too much… and we expect that interest rates will be cut in the upcoming weeks to mitigate any further economic slowdown.
Based on a positive earnings season, it looks to be a little overdone, but in April we looked at how frothy markets are more prone to pullbacks. Markets have been marching up in almost a straight line since last October so late-summer volatility isn’t surprising.
Positive thoughts for volatile days, inspired by behavioral investment counselor Nick Murray:
- The growth of the dividends and values of well-run companies has been permanent over our lifetime.
- The frequent declines in the values of these companies are always temporary.
- The equity markets efficiently process information in real time: earnings, forecasts, economic circumstances, and yes, emotions.
- Whatever the concern “du jour”- politics, interest rates, or whatever, the great companies have always adapted in order to continue being profitable.
As an investor, if you agree to these statements and have created a long-term financial plan, enjoy the freedom and relief of knowing that you do not have to do anything about your investments today, or any other day!
“The real key to making money in stocks is not to get scared out of them”- Peter Lynch
Chart by JP Morgan, Guide to Markets.
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. Dividend payments are not guaranteed and may be reduced or eliminated at any time by the company.
Securities and Retirement Plan Consulting Program services offered through LPL Financial, a
Registered Investment Advisor. Member FINRA/SIPC. Investment Advice offered through Western Wealth Management LLC, a Registered Investment Advisor. LPL Financial, Kennebec Wealth Management LLC and Western Wealth Management LLC are separate entities.