Historically, the U.S. stock market is dotted with dramatic highs and lows followed by higher highs. The ride in between these highs and lows has its share of bumps as well.
Given the long-term advantages of investing in the stock market, here are some strategies to help give you financial confidence as you ride the roller coaster:
- Invest in Quality: Long-term investing should be in companies and investments that offer true financial strength with solid records of growth and profitability. Past performance is no guarantee of future results.
- Diversify: By investing in a variety of stocks, fixed income and other investments you are more able to balance risk and reward. Patience: Sooner or later, even the best investments may take a dip. In a quality portfolio, they could be expected to climb again. Long-term
- Investing: Remember, a successful ride has more to do with time than timing. Be prepared to stay on course and keep your sights on long-term gain vs. short-term swings.
- Tax Awareness: Each investor's unique tax consideration should be reflected in the design and management of his or her portfolio.
- Review: Making sure your portfolio is designed to meet your long-term objective is critical. Review your portfolio and contact your advisor with questions/concerns. This is particularly important if your life circumstances have changed in any way.
It takes discipline, patience, and a long-term investment perspective to avoid reacting to the pressures of declining stock prices.
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