Market Volatility
Market Volatility
By Dr. Gerald House
Stock market volatility is the talk of the town, mainly driven by economic news in the media. Let’s be clear: The mainstream news media is the first organization to shout how everyone’s “pants are on fire.” Should we follow their lead? I hope you don’t. If you are invested in the stock market through your company’s 401K, IRA, or individual accounts, the last thing you want to do is panic, especially if you have a well-diversified portfolio that automatically rebalances and is designed with your specific risk tolerances and behavioral attributes.
The day's news story is tariffs; our president has drawn a line in the sand and vows to even the trade deficit, which has long plagued our country and robbed us of billions of dollars. We cannot keep economically propping up our foreign counterparts. I applaud President Trump for his strategy. It is time for us to level the playing field. Our investment strategy and economic health require a long-term focus. We will suffer some short-term pain to gain a long-term positive outcome.
It’s natural to feel uneasy when the value of your investments takes a sudden dip. Most investors, even seasoned ones, experience a moment of dread when their portfolio appears to shrink overnight. Retirement savings can seem fragile and vulnerable. A drop of 2-3% in a single day can spur thoughts of selling everything to preserve what remains, but acting impulsively often leads to regret. Instead, remind yourself why you invested in the first place. Your portfolio was designed not just for sunny days but also for storms. Market downturns are an inevitable part of the investment journey, and history has shown that markets rebound over time. By selling in a panic, you lock in losses and risk missing the eventual recovery. Staying on the course requires discipline and confidence, but it also ensures that you remain positioned for long-term growth.
So, resist the urge to follow the crowd. Those who sell during turmoil often buy back at higher prices, plagued by regret. Trust in your strategy's resilience, diversification's wisdom, and the steadiness that comes from a long-term perspective. After all, weathering short-term volatility is a small price to pay for the rewards of enduring financial growth. The American economy will survive this tough period, and the trade war will eventually end. Never let emotions rule your financial decisions. Will you commit to maintaining a long-term strategy that has historically proven beneficial?
Do not be anxious about anything, but in everything by prayer and supplication with thanksgiving let your requests be made known to God. And the peace of God, which surpasses all understanding, will guard your hearts and your minds in Christ Jesus (Philippians 4:6-7, ESV).
Your faithful servant
