Keep Calm and Carry On
- The one certainty of investing is that your portfolio will experience volatility. The recent market turbulence is not as abnormal as headlines would have you believe. In fact, markets have returned to a more normal level of volatility in 2018 after an unusually calm 2017.
- While volatility can often lead to irrational decisions, such as exiting markets prematurely, evidence shows that market timing is a poor investment strategy. An investor who exited the market and subsequently missed just 10 of the best-performing days in the past 38 years would have lost out on more than half of the gains.
- For long-term equity investors, the most powerful factor is time. An investor’s time horizon is directly correlated with the likelihood that his or her portfolio will experience a positive return.
Today’s article will be the final Thought for the Week of 2018. Watch for our 2018 Year in Review & Outlook to be distributed the week of January 7, 2019.
From all of us at Lighthouse Financial & Tax, we wish you a peaceful holiday and a happy New Year!