The Stock Market: Ebb and Flow
It is often difficult to tell which waves will have a bigger impact. From the shallows, some waves appear massive in the distance, but do not pack much of a punch. Conversely, there are small ripples that, when they reach you, become a sizeable force.
The Stock Market is the same. It constantly ebbs and flows, down to the nanosecond.
So how can you navigate the waters?
Historical data is the best indicator of market trends. If the economy is on solid footing, it can withstand a “tidal” hit with minimal overall impact. ….And those little ripples?? Well, they aren’t an issue at all. No one knows the future, but we can make educated assessments based on the past.
Portfolio diversification allows investors to ride the waves of uncertainty. A good investor never places all of his/her money in one type of investment. The market’s top earning sector one year, could be its worst in the following year. Strive for a large vessel of multiple investment strategies. A bigger ship can smoothly navigate even the choppiest of waters.
Investments can be confusing. The terminology and jargon, coupled with emotional headlines, can make it hard to steer; that is where a seasoned advisor can help be an invaluable “first mate”.