Thanks to the new tax plan, corporations are sitting on a lot of cash right now. Unemployment is at a low and wages are beginning to increase. Consumer confidence is high and people are spending more money. The market is doing well, so people are spending more money, but if things begin to turn bad, will you be prepared?
The Ups And Downs Of A Volatile Market
Last year, the chairwoman of the federal reserve announced that the rate of inflation was not rising as expect and she really didn’t know why. This made a lot of people anxious and the market took a hit.
Fast forward to a year later, the rate of inflation is expected to begin to rise. Everyone is starting to get nervous about the new inflation rate and, yet again, the market is becoming volatile.
It seems like no matter what happens, people want to find a reason to be anxious.
Now, we’ve added one more unknown into the mix: tariffs.
What Do Tariffs Have To Do With The Market?
Recently, the president announced that there could potentially be a new 25% tariff, which is a tax on imported goods, on all steel and aluminum. The goal is to increase production of these items within the United State, but it’s also going to cause some difficult with our international trade partners.
Products like beer, soup and soda will likely increase in price as they find the supplies for their cans increasing. Other products we buy every day will likely increase too, some that you may not even expect. And that will affect the market, whether we like it or not.
If the ongoing anxiety about the potential of inflation caused a metaphorical fire in the market, these new tariffs are only adding fuel to that fire.
How To Get Ahead Of The Market
We haven’t actually seen inflation yet. It is the fear of potential inflation that is making the market react.
Everything about the market makes more sense if you look at it through the lens of a toddler. It’s not always logical. It’s emotional. It’s reactive. It can get upset over nothing.
This creates a lot of fear and stress for investors, but how can you make sure you’re mentally and emotionally prepared for volatility?
We actually talk about this a lot in these posts in consultations with our clients. The only way to be mentally prepared for a unpredictable market is if you know that your investments are going to be okay no matter what happens. How is that possible?
You make a plan.
An good investment plan that is flexible and reactionary will help you be mentally and emotionally prepared for anything the market can throw your way. If the market goes up, you know what your plan is. If the market goes down, you still know what your plan is.
A solid investment plan prevents you from getting anxious and stressed over every little change in the market, because you know that you, your finances and your future are going to make it through to the other side.
Don’t Let Your Fear Hold You Back
I recently had a couple come into my office and talk to me about their financial situation. They had lost a lot of money during the crash in 2008. They took everything out of the market and never jumped back in during the rebound. They were too scared of losing what they had and it kept them from investing again. As such, they potentially lost out of the chance to make all of their money back.
Don’t let this happen to you.
The reality is, that we’re living in a renewed, volatile market. This means the market will go up one day and down the next.
We haven’t seen these day to day changes much in the last 9 years, but that’s not the norm. Nor should you expect it to be.
You need to make sure you’re ready for these upcoming anticipated changes in the market by creating a comprehensive investment plan.
It is an incredible thing to look at what is going on the world and in the market and know that you are going to be just fine. These drops and changes don’t have to ruin everything you worked for. If you don’t know how to create an investment plan on your own, just call or email us to set up a free consultation. We’re look through over your current strategy and build something that can help you get peace of mind for your financial security.