Don’t Let Short Term Volatility Derail Your Long Term Strategy
Recently the media has been reporting that September is
historically the worst month of the year for the stock market. Some data from Morningstar might be
helpful in keeping you focused on your long term investment strategy and
disregard the short term hype.
The table below provides what the odds are of how frequently
the equity market has been up or down for different periods of time going back
for the 50 years ending
Weeks Months Qtrs Yrs
Up 56% 59% 64%
68%
Down 44% 41% 36% 32%
3
yr periods 5
yr periods 10
yr periods 15 yr periods
Up 81% 85% 98% 100%
Downs 19% 15% 2% 0%
Our 2nd quarter of this year is a prime example
of this type of volatility. In a
recent client review, his accounts as of September 1 were up almost 10% YTD,
but were down just over 8% from April 30th to July 15th. If someone can’t stand this type
of market action then they need to revisit their asset allocation with us. Short term volatility and long term
returns need to be understood and in balance.
Maybe September won’t be too bad and we’ll have
a good 4th quarter and another great year.
Securities through KMS Financial Services Inc.
520.884.7550
jpw@financial-architects.com
2311 E. Broadway
Tucson, AZ 85719
United States