For most American kids, September means back to school and October means blood sugar spikes from tasty Halloween candy.
For most American investors, September and October mean stock market declines from nasty annual corrections.
The annual stock market correction is the “other” Fall holiday, and this year’s has arrived right on time. Of course, that doesn’t make it any less scary for investors who still don’t know that stock market volatility doesn’t equal risk.
Why a Stock Market Decline Now?
Enter the financial press to explain it all away:
China’s currency has been devalued, and its stock market bubble is bursting. The Federal Reserve keeps waffling on interest rates, creating uncertainty…
Blah, blah, blah. Last year’s October correction was caused by fear from Ebola and European instability.
The point is that corrections are going to happen. [ctt title=”Focusing on the cause of the correction is not the answer. It’s how you react.” tweet=”Don’t just do nothing — sit there! @ValueAligned gives advice on October’s #stockmarket decline.” coverup=”VgXfz”]
Don’t Just Do Nothing—Sit There!
October is a common month for corrections to occur. Volatility increases. Stock markets bottom.
It’s a veritable witches’ brew for a stock market decline.
The key is staying put despite the decline.
Like I said, corrections happen most years anyway. They’re to be expected!
In fact, pull up your 2016 calendar. Go to October 1, 2016 and type “STOCK MARKET DECLINE” in all caps. Now, you’ll be expecting it. And it’ll be easier for you to resist the sirens’ call to sell when stock prices inevitably drop next fall.
#1 Way to Protect Your Portfolio from Volatility
The effects of “buy high, sell low” losses are egregious. Not only do they cost you a fortune that you can never reclaim, but they also make you reluctant to re-enter the market. That means you lose money AND miss out on future opportunities.
Luckily, you can prevent all this if you understand what makes successful investing simple but not easy.
I’ve been shouting it from the rooftops for years now, and I can’t say it loudly enough: Volatility does NOT equal risk. And price does NOT equal value. The principles that underline successful investing are actually quite simple—although our emotional brains make them difficult to follow.
I’ve made it my mission to educate you and all other investors how to prevent “buy high, sell low” losses because they’re so devastating to your retirement. In fact, I’m holding a complimentary educational seminar on October 8 to give you the tools you need to save your retirement from Wall Street predation and financial news fear-mongering.