The terror struck earlier this month when the stock market took a deep dive plunge. It was just the beginning of Halloween Horror Month for investors. It’s as if all the frightening forces align during this month to scare the daylights out of investors.
Some People Love To Be Scared
Are you one of those people who are first in line at the opening of the latest scary movie? It is one of those strange phenomena of life that some people actually love to be scared. Fear gets some people all jazzed up. They go to all the Halloween ‘fright nights’ they can find seeking out the scariest.
The stock market is a little like Halloween much of the time. Without some true insight you can easily get tricked or treated. In fact, some people have been literally scared to death by the wild fluctuations in the stock market. For this reason, the stock market attracts dare devils and thrill seekers. It always has. But, you do not have to be a thrill seeker, nor do you have to have nerves of steel to live through the high jinx and horrors of the market.
So Many Fear Factors
The market is like the weather. It fluctuates all the time for so many different reasons. This month we are seeing high tech stocks falling. Some say it is because they are caught in the trade fight with China. And, yes, we are in a trade fight with China, another reason we may be seeing the dramatic fluctuations at the moment. We are seeing higher interest rates too.
If you are a thrill seeker, you may have to experience great losses in order to feel like you’re “in the game.” Or you may want to be able to boast at cocktail parties about the huge gains you’re made, while not discussing the losses. If that’s your thing, you may be bored by a more moderate investment style. You may feel more alive when the market swings really high and plummets to all-time lows. But, you cannot be considered a serious investor.
The market is tied to the world economy and there are so many things that affect the ups and downs. Serious investors cannot be expected to react to each and every fluctuation. As I tell my clients time and time again the best plan is to stay diversified between Short Term Safe Accounts and leave Stocks in your longer-term accounts. That way you can sail through the roller coaster ride with a smile on your face and without a lump of fear in your throat.
If you can prepare for a hurricane, you can prepare for the regular stock market fluctuations and storms. You prepare for a hurricane by following the guidance of those trusted weather specialists who track storms. You batten down the hatches and evacuate when so directed.
You prepare for stock market fluctuations by have a reputable fiduciary financial advisor who acts in your best interest and keeps you diversified as I mentioned above. You maintain short-term safe accounts and leave stocks in your longer-term accounts. Then you can look forward to every October with the same attitude you do toward Halloween. It’s fun to see the kids dress up and ring the bell for their expected treats!