After 8 days of losses driven by fallout over the health care bill, the Dow rebounded yesterday and closed ahead.
Most of the volatility we’ve experienced has been linked to fear that if healthcare couldn’t get through Congress, other Trump priorities like tax reform might not make it either…well, that hasn’t changed, so why is the market up?
While there are other positive signals across the market that we can point to, yesterday’s turnaround highlights something you and I have to understand - the market is deeply fickle. It reacts to headlines, and healthcare wasn’t top of the news cycle yesterday.
That’s why you have to be sure you have a strategy for investing that goes beyond what Congress or the Fed or OPEC does tomorrow. Your investment plan and hopes for the future can’t live on the whims of next week’s crisis!
The most important thing you can do in a week of volatility like we’ve just experienced is sit on these losses for a moment.
You should certainly be invested in the stock market - over time a well-diversified, long-term investment strategy can beat inflation and make you real money - but with so much growth over the last few years, it’s easy to take on make more risk than your plan can truly handle.
Some of you are nearing retirement and you can’t afford significant losses - you don’t have time to make the money back before you have to start drawing on it for income!
Don’t waste this week - Be reminded you can’t control the market.
Better to lose a little growth by balancing your risk today than experience a drop you can’t afford in the next market correction.