I am really excited to talk about this one, Nikki.
We’re getting close to the tail end of this week’s series of one-sentence money tips, and this one might be my favorite.
If you’re worried about how your investments are doing, don’t read forecasts – read history.
As much as people want to believe that they make sound decisions based on nothing more than logic and intelligent forethought – this is simply not true.
If that were the case, we would not have seen people filling up garbage bags with gas in May or buying out toilet paper and hand sanitizer last year.
The fact is, as a whole, we tend to make decisions based on emotion. In the above cases, people saw a forecasted shortage of something they consider essential and panicked.
When it comes to our investments, many do the same thing – panic over what they think is coming and make decisions that will hurt them in the long run.
Here’s the thing — when you review the history of the U.S. markets, one thing is consistent across the board:
Markets always recover after a downturn – and they come back stronger than ever.
Case in point: 5 years ago, the DOW was sitting at about 17,800. Right before COVID-19 hit last March, it was at about 29,400 – then it went down to about 19,100 due to the resulting panic. Now? Just over a year later, the DOW is at almost 34,600 – double where we were five years ago!
Yes, we suffered a major worldwide event, and things looked truly bleak from an investing standpoint – but we’ve done even better than just rebound in a little over a year. History has repeatedly told us that we recover from adverse events, and I have every reason to think this will continue in the future.
This is why I firmly believe that having a financial advisor in your corner to help you put together a sound investment strategy is one of the best decisions you can make for your financial future.
So, why not leave the worrying to the pros? Call 513-563-PLAN (7526) or go online to book your free 15 minute consultation to get started.
Regards,
Nikki Earley, CFP®
