
What Happened Yesterday? Should I Be Concerned?
Author: Jennifer Climo
So, what happened in yesterday’s markets? A 3% decline. What will happen today? Either it will be up or down. In neither case should you change your investment strategy. You should have an emergency fund in a FDIC insured bank account; have a portion of your investments in lower risk bond funds; and have stock funds other than just US large company stocks. This diversification will reduce the volatility of your investments and give you flexibility if you are taking distributions from your portfolio.
Overall, the biggest impact on your being able to have enough money to retire is your rate of saving and your rate of spending - NOT your rate of return. Take this opportunity to re-evaluate how much you are saving and consider increasing it, and/or re-examine your spending. Not because the market has dipped (although if the market continues to decline this may look like a buying opportunity in hind sight), but because managing your saving and spending has a larger impact on your long-term financial success than trying to ‘time the market’ and predict what will happen tomorrow.
The only people who have truly lost anything when the market dips, are those who sell.