Driving to Milwaukee last week on our way to see the Cubs play the Brewers at Miller Park (one of my favorite sports venues), we drove past the Six Flags amusement park. From the Interstate, we could see many of the rides, including several of the roller coasters.
Investors might think they are on a bit of a roller coaster ride themselves. In 2011 the market peaked in April, only to see a pronounced downward trend through the third quarter of the year. The fourth quarter witnessed a nice bounce, which carried through and into the first quarter of this year. Once again, however, we’ve seen a bit of drop since the end of March. Certainly the issues in Europe and the failed Facebook IPO haven’t helped matters.
Should investors get off of the roller coaster? I would generally say no. Market ups and downs are part of the process, especially over the past 12 years. As painful as the 2008-09 market drop was, my clients are better off having stuck to their investing plan versus those folks who sold out near the bottom, booked their losses, and sat on the sidelines as the market staged a tremendous rally over the three years ended March 31 of this year. I firmly believe most of us are wise to stick with our long-term investment allocations. This doesn’t mean set it and forget it, however.
Some financial moves to consider this summer:
Get these items taken care of so you can go out and do some of the fun things we associate with summer:
Here’s wishing all of you a great summer.
Roger Wohlner, CFP®, is a fee-only financial adviser at Asset Strategy Consultants based in Arlington Heights, Ill., where he provides advice to individual clients, retirement plan sponsors, foundations, and endowments. Read more about Roger here.