Long-Term Goals Outweigh Short-Term Opinions

Below are headlines from CNBC in just the past 24 hours: As you can see, opinions vary (all the time).

  • Goldman Sachs believes the US economy will slow to a crawl next year.

  • Market sell-off laying groundwork for 'tremendous opportunities,' Prudential Financial predicts.

  • The market is telegraphing that 2019 earnings growth will not be as strong as anticipated.

  • BMO predicts S&P 500 in 2019 could surge 24% from here under most bullish scenario.

Three things not to do in an equity market sell-off:

Don't panic-sell:

James C. Kelly, a wealth strategist at PNC Bank, tells CNBC that "volatility happens" and that this could be an opportunity to re-balance your portfolio which allows you to buy equities at lower prices. Just don't give into the temptation to "panic-sell."

Don't watch obsessively:

During times of volatility Warren Buffett suggests keeping a level head. In response to market swings in 2016, he said, "don't watch the market closely and don't try to time the markets. It's a natural instinct to want to reduce your exposure to assets that are declining."

Don't be short-sighted:

A 2018 Gallup poll found less than half of young Americans are putting their money in stocks because of the 2008 market crash. Remember that corrections and market downturns are normal and healthy. As an investor, you never want to make decisions based on emotions, especially fear. An interesting fact; a well-balanced portfolio of stocks and bonds has never seen a rolling negative 5-year annualized return over the last 75 years.

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