August 5, 2011
I often post about why I think it's not the end of the world. And yet again today, I think it's not. But with a day like yesterday, people are asking if maybe we can see it from here. Stocks were down sharply yesterday, and I would be surprised if they weren't off to a weak start this morning. Psychology moves herds; herds move markets.
Strip away the madness of crowds, though, and you can focus on two things: 1. your personal circumstances and 2. What you really own. Your investment decisions should be dictated by your circumstances, not by the actions of a trader in Hong Kong or a 401k participant in Miami, even if their moves can affect the market. If you aren't retiring for 10, 15, 20 years, keep your decisions focused on that fact, not on day-to-day volatility. And about that what-you-really-own thing: if you own conservative, well managed investments, you shouldn't have a problem in the long run. Do you really think people will stop buying soap and toothpaste?
Most important: take a deep breath and think before you worry too much. Talk to someone you trust. We have been here before, markets don't always move in one direction. If I had to guess, we're closer to a bottom than a top.
(This article contains the current opinions of the author but not necessarily those of Brighton Securities Corp. The author's opinions are subject to change without notice. This blog post is for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities).