We now have a conflict in the Middle East with Israel’s war against Hamas. It threatens to spread wider than a regional conflict. Along with this, Russia seems bogged down in a war in Ukraine and China is once again threatening Taiwan. Not exactly a stable and peaceful time we live in right now. Here are some things to do and not do when the waters turn choppy.
First, realize we have seen this before. Everything from World War II to 9/11 rattled the markets, but every time they came back to make new highs.
Second, don’t make irrational/ emotional decisions when the capital markets look bleak. One shouldn’t make emotional decisions when the market is going up either.
Third, slow and steady wins the race. Buying the same amount each month will lower your cost when the market is down.
Lastly, avoid big moves. If you want to sell because you are overly bearish and pessimistic, consider moving a portion to CD’s. If you are optimistic, don’t buy all at once. Maybe split up what you want to invest over a 3-6 month time period.