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With the market being down nearly 10%+ to start the year and more than 14% off its all time high, the media frenzy makes it feel like we are in a death spiral. As Warren Buffett says “The StockMarket is a very efficient mechanism of transferring risk from the impatient to the patient.” Right now it is more important now than ever to stay calm, maintain composure and a sense of historical perspective.
There are really only a few options on how to react to a market panic: Continue to invest if you are doing so; put cash to work if you have it; or at worst, as Jack Bogle famously said “Don’t do something, just stand there.”
Many people are very emotional about investing, but you don’t have to be. Having a solid financial plan substantially reduces anxiety during these times. Those without a plan are a rudderless ship at much bigger risk of making big changes in the middle of a market sell off; which is like going outside to paint your shutters during a category 5 hurricane.
While this drop feels terrible you have a choice as to how terrible you make it on yourself. You will make it feel substantially longer, worse and potentially catastrophic by reading every doom and gloom article, incessantly checking your account balances online or watching the marketsminute by minute.
A great piece of advice by Abby Joseph Cohen, Senior Investment Strategies at Goldman Sachs who once said “If you want to reduce the volatility in your portfolio, don’t look at it as much.” This is sage advice as current “crisis”, like all others before it, will be completely temporary.
These sell offs turn out to be a great buying opportunity for investors and this time will prove to be no different. Below are a few pieces that provide some context and perspective that we have been here before. I urge you to please reach out to me if you have concerns or questions as we will get through this difficult time, just like we have done every time before.
Hang in there,
Gavin Gleason, President
50 Reasons Why This Is The Best Time Ever
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Markets & "Crisis" Since '08
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The Healing Power of the Equity Market
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The Gleason Group 9418 Norton Commons Blvd, Suite 100 Prospect, KY 40059

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