2016 is off to a rocky start, to say the least – but this offers us all a great opportunity to evaluate our portfolios and investment strategies.
We are in the middle of a correction; volatility is high and uncomfortable for most.
Turbulent market conditions have been triggered by multiple factors – the Feds finally raising interest rates, the uncertainty of future rate hikes and their impact on growth, international market instability caused largely by China’s slowing economy, and commodities prices being dragged down by oil prices, to name some. Momentum will also play a large role in this market as investors try to identify and get in front of trends.
This reminds us the importance of a diligent and well balanced investment strategy. We should all assess the level of risk in our individual portfolios and make smart, meaningful adjustments, if necessary.
Two main fundamental investing concepts to help us navigate through periods of high volatility are:
1. Check your emotions
2. Invest for the long term
It is difficult, if not impossible, for anyone to predict which direction the market will move; don’t let fear drive your decisions. When the market experiences volatility in the manner it has in the early part of 2016, we should stay mindful that all markets have their cycles and maintaining a consistent strategy will help reach long term goals.
We at Sequoia are always available to answer employee questions and help them through these challenging times of volatility and uncertainty.
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