General market info.
nVest Advisors was conceived and created to provide effective, low-cost, fully fiduciary financial planning and investment management for all of our clients, but especially for those clients who are largely overlooked by other RIA firms due to income or accumulated wealth limitations. The middle-income American family and small business owner have traditionally been targeted by
What does history tell us and how should investors react? The January Effect The January Effect is a pattern exhibited by stocks in the last few trading days of December and the first few weeks of January. During this period, particularly starting in January, the theory is that stocks tend to rise. In simple terms,
It seems like once or twice a year for the last few years, we’ve had to address concerns with short-term volatility, usually in the equity (stock) markets. We’ve addressed this most important issue several times already (here) and (here) and (here) and (here), and today we felt it was important to remind our clients to do their very best to ignore the daily swings in value that are happening at the moment. What causes panic in most people is that we aren’t sure why the drops are happening, and we don’t know when it will stop. It’s uncertainty, and not being able to see the future, that makes you panic as an individual investor. The investing world, as a whole, is no different. Read the headlines and the first few lines of every news story about market volatility during the past few weeks and you’ll see the same worries played out over and over again. “The selloff is a continuation of… ongoing worries about the U.S.-China trade (dispute)…” “Dow Jones Futures: Scared Yet?” “The losses have been sparked by a flurry of concerns about everything from higher interest rates and crashing oil prices to the US-China trade war.” “This touted market predictor [translation: a GUESS] screams sell…” (Emphasis ours.) It’s clickbait. It’s all emotion. It’s even hysterical. Get enough of that GroupThink happening, and you’ll most definitely see temporary drops in the markets. At nVest Advisors, we try our best to understand the emotional dynamics underlying most investing decisions. We’re also keenly aware of how often those emotions harm our clients’ investing goals rather than help them. Keeping your emotions out of your investing is one of the most important things we can do for our investment advisory clients.
As we write this blog post the afternoon of Monday, February 5, it’s been a very rough day for the US Market indexes. We believe this is the start of the markets returning to a more normal pattern, after an historic run-up in 2017, not a sign of significant economic concerns and for most investors, it’s nothing to worry about. We’ve written about market volatility several times in the past. To read our other takes on this phenomenon, read here and here and here. It’s important to remember a few things we consider investing Maxims here at nVest Advisors. We stick to them for the benefit of our clients, but they’re important to remember for all investors. When markets get spooky, here are four bedrock principles you should always remember.