By Bob Barber, CWS®, CKA®
The only guarantee in the stock market is that it will have ups and downs. This is true in any market, not just the stock market. So what should you ask yourself when the markets are in a downward trend? Take a look through the following seven questions to help you weather the storm:
- Will I need everything in my diversified investment portfolio in the next 1 to 3 years to live on?
- Do I have enough funds that are NOT in stocks and equities to last me for the next 3 to 5 years to live on while waiting for the stock portion of my portfolio to recover? Note: A moderate portfolio has as much as 40% to 60% in fixed income, which allows the stock market portion of the portfolio to recover over time.
- Am I smart enough to perfectly time the market by getting out at the perfect time and getting back in at the perfect time? Note: just missing 3-5 days of positive market returns in a month can affect overall performance dramatically.
- Do I believe my well-diversified portfolio in things people use daily like technology, healthcare, medicine, utilities, gas, transportation, food, shelter, clothing, etc. will no longer be needed in the short term?
- Will I allow “short-term thinking” to get in the way of long-term success?
- When the markets are down should I look at it as a buying opportunity instead of a selling one?
- Do great investors like Warren Buffet go with the crowd and run away from the markets when they are correcting or buy stocks at lower prices?
If you’re already one of our clients, then we hope these questions help you process a downturn in the markets as our team is managing your assets according to our guiding principles.
If you’re not one of our clients, then contact our office today at (830) 609-6986 to get started with our active, forward-focused, faith-based investment management so that you don’t have to go it alone.