Good Financial Reads: Advice for Investing in the Current Market

Stock market volatility — aka its ups and downs — is back. 

Nearly two years into the pandemic, the coronavirus continues to impact our lives — and cause market volatility. Last week, global financial markets reacted to news of the omicron variant. By now, uncertainty surrounding changes in the world due to covid-19 is both new and familiar. After various pullbacks and market highs in previous months, how can you handle your investment portfolio — especially in these up-and-down markets?

Let’s compare investing vs. speculating. Are you someone who likes to buy a lottery ticket, hoping yours is the winning number?  Or maybe you like to find the hot buy of the day versus buying something that will last a long time, but you may spend a little more to get it?  Or like the tortoise and the hare getting somewhere fast versus slow and steady wins the race?

First let’s talk about these personalities and which one you are.  We are going to dig into how that may affect or even define your investment personality too.

We aren’t different from the vast majority of financial advisors when we recommend avoiding knee-jerk reactions to market movements.  History has plenty of market meltdowns, a number of which we’ve been through.  Up to the current market disruption caused by dual factors of COVID 19 and a price war in oil, we’ve put up a pretty impressive percentage of market crashes that have been followed by market recoveries:  That number is 100%.

The business cycle is advancing despite a number of investor concerns, one quarter after the economy returned to pre-pandemic levels. And while the pace has decelerated, this is normal after last year's extreme rebound. For investors, this is important because an economy that is expanding - even at a slower rate - is what supports a robust bull market. What should those worried about their portfolios expect from the economy going forward?