Special Edition Newsletter
March 3 rd , 2020
Market corrections are not easy. In a perfect world the market would go up and up and we would never have to worry about down turns. With global fear of the coronavirus, a 2020 election, fears of recession, and instability in the bond market, the market has begun a down turn similar to the financial crisis of 2008. The Dow Jones Industrial Average dropped 3500 points during the week of February 24 th -28 th . That’s a steep drop.
Let’s face it, if your heading into retirement or already retired, market corrections are downright scary and frustrating. Having a plan is key, especially during times like this. However, if you have a longer time horizon to invest…well now could be a great time to buy in themarket, because of discounts.
For example, many of us use Apple products on a daily basis. iPhone, Iwatches,iPad, Mac BookPros, dominate the technology in our lives. As of January 29 th 2020, the stock was at $327.85per share. On Thursday February 27 th , the stock closed at $262.00 per share, a $65.00 changesince January. That’s a discount or a sale.
It’s never easy to predict how far the market will fall and Apple may continue to go down,especially with the risk to supply chains being disrupted due to the Coronavirus. If you have alonger time horizon, looking at market corrections as a sale can beneficial. Let’s say Apple recedes to $250.00 and you by 100 shares. If over the next year it returns to 327.00 per share,you just made $77.00 per share andmade $7,700. Not a bad deal!
Again, corrections are not easy! Corrections like we are experiencing right now can cause paralyzing fear and anxiety. Fear that can cause people to make devastating financial decisions. These are the times when having a sound investment plan is crucial, because a sound plan can mitigate the emotional roller coaster that comes with investing.
It’s important to remember that even though corrections are challenging, they are usuallytemporary, and market will continue to rise over time. Just look to history for that confirmation.If you do need help, feel free to reach out to us. We can get you in the right place.
Thanks for Reading.