Investing for the long term,pull away from a selling mindset

Volatility is part of investing in any market. Real estate, stocks, currencies and commodities are examples of markets where volatility shows up more often than people often like but a shift in mindset where we think long term is needed.

Volatility happens due to economic factors, political factors and could occur when nature kicks in with devastating storms or tsunamis.

Some of the recent major events that caused big drops in the markets were the 9/11 attacks, the financial crisis of 2008 and lately Brexit.

Each of such type of an event could cause panic and let people to move their assets to safer vehicles or even move their money completely out of the market. Many people watch the movement of their portfolios holdings and when they observe a great decline that can cause short term thinking to take over and can cause for investors to make decisions based on only how the market looks at that very moment.

Volatility happens due to economic factors, political factors and could occur when nature kicks in with devastating storms or tsunamis.

 

Investing for the long term

There is a great division in the philosophy around how to invest but it is very clear that no one knows what the market will do tomorrow and it is fair to say that it can be extremely difficult to predict what the market will do over the next 2, 3 and 5 years.

What we do know is that history tells us to stay invested for the long term and history tells us that markets have always recovered from its dips. The 2008 market crash caused a lot of concerns and caused a lot of people to jump out of the market. As of today (7/12/2016) the market has more than recovered and the ones who decided to get out have lost out on large gains since the bottom that correction.

The same story can be told around the 9/11 attacks that caused a market dip and even the Brexit turmoil that caused the market to drop was short lived.
History does not guarantee us that we can predict what will happen when the market decides to correct itself next time but it does show us how staying invested with a long term mind set can be very beneficial.

Article written by CreativeNurse Team
2016-26068 Exp. 10/17