I was disappointed by the FOMC decision to not raise rates at this time. The U.S. equity markets are acting like they are too. My advice is to dare to relax and breathe.
Things to Avoid
#1) Don’t panic.
U.S. stocks, on average, are trading at historically fair multiples to adjusted earnings.
#2) Define “correction”.
If the forward outlook is favorable and I believe it is for U.S. equities, it doesn’t matter much if we call this a standard correction. Media pundits have used this term to describe declines of 5% and 25%. It varies.
#3) Turn the news off sometimes.
Constant media news updates place to much emphasis on short-term volatility. It’s not healthy. The U.S. isn’t doing poorly. There are plenty of positive economic reports out there. Let me know if you need to learn how to find them.
#4) Know yourself.
Did you sell during 2008 recession? Do you tend to want to liquidate when market is down and buy when it recovers? If so, be cautious, the market likely isn’t for you.
#5) No crystal ball exists.
Diversification works in times of uncertainty. Beware of those that know what is coming next. I don’t.
I believe in the efficiency of the markets.
Each September, we work diligently to evaluate progress toward annual goals and plan for the fourth quarter which may be strong. This year will be no exception.
We got more ambiguity out of the FOMC meeting so it’s probably best to sit tight, make minor changes if personal situation requires and stop worrying.
Let me know if you have any questions or need any additional resources.Until next time,
Susan R. Linkous, AIF®
The Linkous Group, Ltd.
A Registered Investment Advisor