In times like these, as markets decline due to heightened fear over continued spread of the coronavirus, there are many reasons investors shouldn’t panic including the more coordinated effort dealing with the outbreak and that the mortality rate so far is lower than other pandemics. From an investment perspective outbreaks have very little medium to long term effect on the market. Markets rise and markets fall, and while it may be uncomfortable while we’re in the thick of it, history shows that over the long term they go up more than they go down.
How do you reduce anxiety when markets fall? And how do you give yourself the best chance to meet your goals? The answer is simple: stay invested. Once you’ve built a well-diversified portfolio suited to your goals, time horizon, and tolerance for risk, staying invested through all market conditions is a time-tested strategy for achieving investment success.
Yes, it’s possible to make more money buying and selling investments throughout the year to capture gains and avoid losses, but it’s unlikely. Using this strategy, the average investor ends up earning a lower return than what they would have had they stayed the course as buying and selling at the wrong time can lock in losses that would eventually have been erased. While some may consider it boring, the best strategy is to stick to your investment plan, maintain a diversified portfolio, and look to decades of positive market trends for comfort.
Contact your Advisor today to get a clear understanding on why simply doing nothing is more likely your best plan of action.
Mutual funds are offered through Credential Asset Management Inc. The information contained in this report was obtained from sources believed to be reliable; however, we cannot guarantee that it is accurate or complete. This report is provided as a general source of information and should not be considered personal investment advice or a solicitation to buy or sell any mutual funds.