An email I sent earlier today to our clients. Thought you might also benefit from this…
I can understand how the recent equity market volatility and the media frenzy coverage can have many investors concerned. Also, don’t underestimate the amount of very poor investing advice you will most certainly receive over dinner and/or casual conversations from well intended and highly emotional yet ill informed family and friends during these moments. The good old suggestions to buy Gold or Silver, go to cash, etc… will most definitely be in vogue.
Periods like these are what really define long term investing. For all of us long term investors, this is not anything to be worried about. There are many reasons that go into this understanding, so feel free to call me if you would like for me to go into more detail.
When we prepare portfolios, we are very well aware that we will have times when the equity markets will have volatility and poor performance. This is why your portfolios have a specific percentage invested in high quality, short term bonds and cash. That specific percentage is based on each of your individual short term needs and long term goals.
Again, I’m not concerned about the long term effects of this volatility. In the short term, I am looking for cost effective and tax efficient opportunities to rebalance within your portfolios, but it is INCREDIBLY IMPORTANT that we maintain our long term perspective.
I hope this helps, but again please don’t hesitate to reach me if you have any questions. I’m always happy to help.
By the way, this morning I went into a Yoga class at 10 AM and the Dow Jones was down 1,000 points. When I came out at 11 AM it was only down 600 points. As I type this, it is only down 137.
More people need to practice Yoga. It’s better for the equity markets. :-))