4 Perspectives – Market Volatility

Don’t Be Short Sighted 

The more often you update yourself on the market’s fluctuations, the more volatile and risky it will appear to you — even though short, sharp declines of 5% to 25% are common. The U.S. & Australian stocks market have, in the past few years, been extraordinarily placid by historical standards. Even the sudden drops of the past few days are well within the long-term norm. Fixating on fluctuations in the short term will make it harder for you to remain focused on your long-term investing goals.

High Emotions = Bad Decisions

As I am writing this article I am looking at a respected online news site. This is what I am looking at:
ASX ends worst day since the GFC
Global markets are in meltdown
Bloodbath brings back GFC fears
Australian shares have staged a staggering rally today

No wonder as investors we get emotional. Volatility is a normal part of investing in growth assets, which is why you gain a potentially higher long term return. Remember when someone sells another is buying, which reflects two different attitudes or opinions on the price that day.

We Are Not Selling Our Assets Today

When markets are down ask yourself this question; am I selling my growth assets today? If not, the price represented today is not your price. Whether you are in the accumulation phase or retired we should always consider our growth assets as long term investments.

Alman Partners Commitment

To provide our client’s with confidence that no matter what happens in the markets, the economy or the world, they have the highest probability of achieving their most important goals.

Stephen Lowry CFP, DFP, FAIM, is a representative of Alman Partners Pty Ltd, Australian Financial Services Licence No: 222107.

Note: This material is provided for information only. No account has been taken of the objectives, financial situation or needs of any particular person or entity. Accordingly, to the extent that this material may constitute general financial product advice, investors should, before acting on the advice, consider the appropriateness of the advice, having regard to the investor’s objectives, financial situation and needs. This is not an offer or recommendation to buy or sell securities or other financial products, nor a solicitation for deposits or other business, whether directly or indirectly.

 

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