The US markets have taken a sharp decline in the final days of 2015 leading into the first week of 2016. Today the Dow closed at 16,906.51, down over 252 points. It wasn’t that long ago that the market was near 18,000.
To begin with, we teach people to invest in mutual funds, not individual stocks or bonds. This will reduce your risk & exposure to some of the volatility. Also, we don’t day trade. We don’t speculate. We invest for the long term, at least 5-10 years or longer. Your first real investing goal should be for retirement which for many people is 20-40 years away.
What has happened over the last few days is a short term event. You can weather the short term events. The market goes up, the market goes down. Make sure you are invested a good selection of mutual funds and keep plugging away, keep investing the same amount each period using Dollar Cost Averaging.
Don’t be nervous and jerky! There has not been a time in the history of the stock market that it did not recover. So, don’t panic. The stock market is like a roller coaster, it’s up and it’s down. And remember that the only people who get hurt on a roller coaster are those that jump off.