The Dow Went Down… So What?

For those of you who have been paying attention to the stock market at all, you know that this was not a kind week to traders. According to Yahoo Finance, the Dow was down a total of 4.23 percent.

If you are an investor, this shouldn’t matter a whole lot. I, like most this week, personally felt the hit that the markets took. However, I am not worried. I invest for the long term and so should you!

There are day traders out there that do well. Most of them also spend every waking second researching and trading. I for one, am not willing or able to do this, therefore day trading doesn’t make sense for me. I am more concerned with being profitable in the long run.

As you know, I have a long time before I plan on retiring or needing the majority of my funds. I want my investments to do at least as well as the markets overall and I want to take on less risk achieving that return.

I invest mostly in highly diversified mutual funds in order to accomplish this. These are growth oriented, and I plan on taking advantage of compound interest to build my nest egg. This is by no means the only way to accomplish diversification or you personal investment goals. Before jumping into an investment or contributing to a retirement account, I strongly recommend speaking with a qualified financial planner. One of my favorite and extremely knowledgeable advisors is Art Dinkin. His customer service oriented business is well known in the industry.

Why Significant or Not So Significant Down Turns in the Markets are NOT a Big Deal

If you look back at the history of the stock market, it’s past performance indicates that the markets will go up and down in the short term but over time will increase. Ideally, which has been true in the past, the longer you hold your money in the market, the higher return you earn.

At JPMorgan Chase, where I am a banker, I constantly meet people who have heard horrible stories of individuals losing money in the “stock market,” or they have possibly lost money themselves. There are very logical reasons that this occurred, in most all of the cases I’ve heard.

Here in Arizona, the real estate market has been great over the past 10 years and people often compare the two to me. In reality, people try to buy their houses in a down market and then sell in an up market. Nobody would sell there house in a down market, if possible, right? They know that if they hold on to the home, eventually the housing market will go back up.

When it comes to their investments in the stock market, more often than not, these very same people who would never sell their house in a down market, willingly unload their shares when a stock drops by 4%. Sound familiar?

For some reason, most of those that I speak with about investing, have this stigma that the stack market is an extremely risky investment. I really don’t agree with this and while past performance is no guaranteed indication of future performance, I for one have seen the results that investing with a diversified portfolio for the long term can achieve!

I am encouraging that everyone who has not seen or talked to a financial advisor within the last year to make an appointment with one by the end of next week!

I would enjoy to hear any feedback or experiences you might have had with investing. Please let me hear it!