In recent weeks, we’ve seen several major stories in the news. The tough times the global markets have seen were fueled by the COVID-19 (coronavirus) and were exacerbated by start of an oil price war between Saudi Arabia and Russia resulting in declining oil prices. The results have been a downturn in the markets and general uncertainty.
How might this affect me? When major events make headlines, it’s easy to put yourself in the picture. Knowing, as well, how such events might affect the financial markets, it’s also easy to wonder how your investments and retirement strategy might fare.
The truth? Political ups and downs, virus outbreaks, and other circumstances might lead to some short-term volatility on Wall Street. But it’s important to remember two things: 1) Your portfolio is positioned to reflect Your risk tolerance, Your time horizon, and Your goals. 2) The way we experience news has changed over the years, and not all of it for the better.
Never-ending news. On June 1, 1980, businessman and broadcaster Ted Turner debuted Cable News Network (CNN), the world’s first 24-hour television news channel. In the four decades since, other similar channels have emerged. Collectively, they changed how the world experiences news. Notably, it was the dawn of the 24-hour news cycle.1
Before 1980, news was very different. Major newspapers might have published several editions during a day, but most areas only had a morning or evening edition. Radio might offer news break updates at the top of the hour, with news programs in the morning, afternoon, and evening. Television followed a similar pattern.
The never-ending news cycle means that news organizations have an interest in continuing to report on the same news story even though little or nothing has changed. Twenty-four hours is a lot of time to fill, and they need ratings in order to be of value to advertisers. While this doesn’t necessarily mean that the news has become inaccurate or sensationalistic, it might be perceived as repetitive.
It’s also becoming ubiquitous. With our smartphones, we’re often receiving news updates immediately throughout the day.
Keep informed, but don’t be rattled. Your investment plan and retirement strategy, which we have worked hard with you to design, was built to adjust to the changing markets. Staying the course is often the smartest move, partially because you aren’t reacting immediately to a dip, and you might benefit from a potential recovery.
Potential Opportunity? If you have cash reserves earmarked for a long-term goal of college savings, retirement, or building wealth, now may be a great time to take advantage of lower pricing, allowing for the purchase of additional shares.
As one of Warren Buffet’s famous quotes goes, it’s wise to be “fearful when others are greedy and greedy when others are fearful.”
So in times like these, let’s focus on potential opportunity of finding good value in buying.
Reaching out. Over the past few days we have reached out to many of you individually to discuss strategy, your risk tolerance, your individual investments and your concerns. If you haven’t heard from us yet, you will, and at anytime if you would like to call us, we’re here for you. 360-714-3378
Please stay healthy,
Craig, Jodie, Beth and Travis
Waddell & Reed, Bellingham, WA.
1. Acorns.com, February 27, 2020
This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events or a guarantee of future results. The information presented does not constitute a solicitation for the purchase or sale of any security and is not a recommendation of any kind. Please consult your financial advisor before making financial decisions. Investing involves risk, including the potential loss of principal. 03/20