I have never been a proponent of market timing and I certainly can’t predict the future. But we are currently experiencing an all time high in the market. The question is…How high will it go before we see some sort of correction. Economist agree that the current market conditions are all but primed to follow the cycles of growth followed by correction. The big question is how great will that correction be Five percent? Thirty percent, Fifty percent? Who knows. We can only deal with the facts that we know and only act on what we can control.
What we know
We know that markets go in cycles. If you look at a chart of the S & P growth over the last 100 years you can see a pattern of 35 year cycles. Usually twenty to twenty five years of no growth or loss and 10 years of growth. The big question is where are we now? Well since 2008 the market has more than doubled in growth. We are experiencing new highs but also experiencing a lot of volatility which may be a little gut wrenching for a few investors.
What we can control
One area that we can control is our behavior. As we have seen with study after study including Dalbar (who studies investor behavior) the average self investor experiences a two to three percent growth on average over most 20 year periods and the reason is fear and greed. Even thought the S & P indexed investor experienced a 7.1% average. Undisciplined investors will buy in a rising market (buying high) and sell in a falling market(selling low) which is the opposite of basic investing 101.
Many of us forget the entire reason we invest in the first place and that is to make our own retirement or legacy profitable so we can retire comfortably. However we get caught up in worrying about returns instead of staying with our plan if we have one. I tell clients not to concern themselves with what returns they are getting in the short run and look at the overall picture for THEIR retirement. If they take the focus off of their own situation they get caught up in the fear and greed cycle and become part of the statistics. It is for that reason I consider myself to be a financial coach and not an investment guru.It doesn’t take much more than paying attention and staying with the plan, however most of us (including myself) need an objective point of view to keep us on track for the long haul.
Now my style doesn’t fit everyone out there and that is why I offer a free consultation to see if there is a good fit with a prospective client before engaging them. I actually have sent folks away who I felt weren’t an ideal fit for both of us. When beginning a relationship we do more soul searching than fact finding to see if we can get along in the future.
If you think that maybe there might be a good fit and you would like to experience an no pressure 1 hour consultation to investigate that give me a call at 610-695-8748 and we can compare calendars to set up a date. Or click here to set up a time on my website just let me know in the message that you want a preliminary meeting.