Is it time to panic?

Is it time to panic?

by Amber Idleman on Feb 12, 2018

Market Commentary, Retirement, 401k, Panic, What to do next

 

 No, not yet!  Actually, it is never time to panic.  But it is always a good idea to get professional help with your investments. 

 

The recent stock market volatility has un-nerved a lot of investors.  Just this past week we had 2 days when the Dow Jones Industrial Average fell by more than 1,000 points.  However, in terms of percentage, February 5th ties for the 10th largest drop and the February 8th decline is behind that.*  And, as of close yesterday, the S&P 500 is still 15% higher than where it ended 2016.  This is not to make light of what has recently happened, but the tools we use have not yet signaled a call for more defensive action. 

 

A lot of complacency had built up in the market as evidenced by the decline in the volatility measurements to all time lows just prior to the selloff.  That complacency has been shaken a little.  So, is it time to sell out?  At this point we have barely entered correction territory for the major averages.  Something that actually happens to the markets fairly regularly!  Sever downturns are usually accompanied by a recession and there does not seem to be any evidence that one is looming.  But that does not mean you should put your investments on auto-pilot.  Every market environment, including this one requires proper guidance and navigation.  And a recession may come one day that could result in a severe market downturn.  We have already had 2 in this century!  After the 200 Tech Bubble decline it took the S&P 500 87 months to regain that high point.  And after the 2007 Housing Bubble decline it took the S&P 500 66 months to recover that high.  Without a game plan to deal with those markets, anyone’s retirement plan would be derailed. 

 

What is your game plan for this market?   Are you prepared for a real downturn?

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