Recent stock market ups and downs may have you worried about your savings and investments. I encourage you to stay calm and remember that time is on your side.
Market declines, while unnerving, are more common than you think—in fact, every year since 1950, the S&P has experienced three to four market declines of at least 5%.1 Your current savings and investments likely have 20-30 years to weather market changes and continue working for you. With many years of saving and earning ahead of you, this downturn in the market is not likely to change long-term plans.
While no one knows for sure how long this volatility will last, some time-tested considerations may help you breathe easier in turbulent times.
Diversify your investments. Even when markets are down, a properly diversified portfolio can improve the likelihood of achieving your goals and provide a smoother ride along the way.2 Review the investments in your account to determine if they continue to make sense for your age and future plans.
Don’t “time” the market. Resist the urge to readjust your portfolio based on market conditions alone. Your overall financial plan should be set for your long-term goals; making short-term decisions during times of market uncertainty may often hurt your progress toward your goals.
Manage your emotions. Take actions based on your financial plan, not your emotions. Checking your investment balance every day may add to your anxiety. Try to tune out stock market news, and remember you likely have decades before retirement.
While fluctuations in the market are unsettling, you can better weather the uncertainty by maintaining a long-term view of your investments and goals.