Did you know that the stock market experiences a correction (greater than 10% decline) in almost every year? 2017 was the exception and not the rule when it comes to normal volatility in the stock market. Is the recent weakness in the market the sign a correction is coming? It is nearly impossible to predict precisely when market corrections will occur. These market corrections typically create great buying opportunities. Those who sell (as I am sure some did at the February 2016 lows) end up being the ones who are worse off in the long run. Our job as financial planners and advisers is to put each client into an asset allocation that allows for them to stay course over long run and benefit from the growth that stocks provide in their portfolios.
For long-term investors, knowing the difference between what can and cannot be controlled is the key to both financial success and peace of mind. While all investors would like to believe they can predict or even control the direction of the market, experience teaches us that this is difficult to do. Constructing and managing an appropriate portfolio, while making strategic and tactical allocations based on market opportunities, ideally with the guidance of a trusted advisor, is often the best approach. However, while following markets and maintaining perspective on the economy is important, an even more fundamental key to success is simply to start saving early, stay invested, and remain focused on long-term financial goals. What can investors do to benefit from these principles today?