Stock market falls: How to keep the headlines in perspective and stay calm
Worried about falling stock markets? Discover why market volatility is normal and why keeping a long-term perspective matters for investors.
Earlier this week, the US midterm elections saw the Democratic party win control of both the Senate and the House of Representatives.
In the days since the result became clear, shares in major US technology companies have fallen amid concerns that tighter regulation could slow AI expansion. Stock markets elsewhere have also fallen.
Market turbulence is a natural feature of investing and should be expected from time to time.
Even so, it’s understandable to feel anxious when you see headlines about falling markets, especially if you’re wondering what this means for your financial future. If that sounds familiar, we want to offer some reassurance.
First, we’re here for you.
If you have questions, concerns, or feel anxious about how these falls might affect your financial future, please don’t hesitate to contact us. Providing you with the information and reassurance you need is a vital part of our role, and we’re always happy to do it.
Second, headlines are designed to grab your attention.
News outlets and social media commentators want you to read their content. Dramatic headlines can make a few difficult days on the stock market feel more significant than they are for your long-term financial plan.
Finally, it’s those who stay calm and remain invested, despite the turbulence, who usually get rewarded.
A few days of falling markets can feel unsettling, but your long-term goals are very likely to be exactly the same as they were a week ago.
Here’s how three well-known voices in investing have put it:
“Don’t do something. Just stand there” – Jack Bogle, founder of Vanguard
“When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever” – Warren Buffett, Berkshire Hathaway
“The only way investors can hope to do well over time is to exercise patience” – Morgan Housel, author of The Psychology of Money
As we said, stock market turbulence is part and parcel of investing.
However, if you’re wondering whether the recent falls affect your plans, get in touch as usual. We’ll be happy to talk it through with you.
Please note
This communication is for general information only and does not constitute advice. The information is aimed at individuals only.
All information is correct at the time of writing and is subject to change in the future.
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.
Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.