As the stock market makes and retreats from new all-time highs, the commentary in the market is turning to the extremes. Isn’t that what always happens? In one corner we have the “this-time-is different” believers that interpret the economic numbers and market activity and are telling us that there is no end in sight to this bull market. In the other corner we have the “doom and gloomers” that are convinced by the same economic and market data that a market correction is inevitable. Who should we believe?
Are we headed for a correction? Sure, at some point we will have a correction. Have we learned nothing from the past? The market moves in cycles. It always has and it always will. Nothing, including the market can go up forever. Corrections are simply the natural movement and cycle of the market.
Where is the market headed? I have no clue and neither does anyone else! The families that we work with do not hire us to guess which way the market is heading on any given day. We are hired to put in place a financial plan and asset allocation that will help them achieve their long-term financial goals regardless of what occurs in the market. Professional traders will be the first to tell you that trying to pick market tops and bottoms is a sucker bet. If the pros don’t do it what makes us think we should try?
Financial success comes from the dogged determination to establish and follow a true financial plan. If your “financial guy” insists on placing trades every time there is a story in the news perhaps it’s time to take a look at whether they have your best interest in mind or only their income.
David J. Seibel is founder and Managing Partner of AGS Aurora Financial Services LLC (www.agsaurora.com), an independent financial advisory firm in Matawan, New Jersey. You may contact him by email at firstname.lastname@example.org.
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