Balanced Financial Concepts Market CommentarySubmitted by Balanced Financial Concepts, Solon, Ohio on October 30th, 2018
October is here, bringing with it changing leaves, shorter days and stronger winds. Last week, like a dog that’s been pushed just a little too far, we saw that the stock market’s bite can sometimes be worse than its bark.
We are more than 10 years into this bull market and last week the bull sneezed. The farther we go, the louder the news and the noise gets. Also greater is the likelihood we’ll see the markets change directions. We mentally prepare for a reversal, but we are always struck with fear and anxiety when it happens. “I can’t afford another 2008!” Markets move for a variety of reasons and last week’s jolt in the markets could be attributed to several, including interest rates rising, tensions with China, tariffs negatively affecting company profits, upcoming U.S. midterm elections, and lower growth projections across the world.
We can’t control performance. We can control the cost of our investments, the risks we buy, and how we react to the noise around us. Market behavior is out of our control. Market selloffs are normal and we have seen them before. Besides, who doesn’t like a good shopping spree when everything’s on sale?
The reality is that the average investor not only underperforms the overall market, he or she also usually underperforms their own investments. Translation: if they simply let their investments do what they’re supposed to do, they’d be better off.
What should you take away from last week?
1. Stick to your plan. The importance of a BALANCED portfolio is clear when we see a sudden drop in the value of stocks. We have been proactive about protecting recent gains and preempting (un)expected volatility.
2. Keep your eyes on the prize. Focus on your long-term goals. Now more than ever, have faith in the ability of your portfolio to get you where you’re going.
3. Trust the team you’ve chosen. If your goals or your risk tolerance have changed, call us. We’ll sit down together, review your goals, reassess your risk tolerance, and make sure the train stays on the right track.
Brace yourself for what could be a bumpy road ahead. Don’t worry, we’re along for the ride too.
Remember: At Balanced Financial Concepts, we focus on tomorrow, so that you can focus on today.