Many investors are unsure of what 2019 has in store for their financial investments. Listening to the news and financial markets may seem like a roller coaster ride. The S & P 500 and Dow Jones averages swing up, and then down, sometimes all in the same day. Opinions from financial experts as to where the markets will go in the upcoming year vary greatly. Some say the markets will stabilize, some say they will improve and others say there could be more losses coming our way in 2019.
One thing everyone agrees upon is the swings we experienced in the last quarter of 2018 was uncharted territory. One thing to remember when it comes to your individual financial strategy is, what goes up eventually comes down and what goes down eventually comes back up again. This is not a time for making rash financial decisions.
Some of the best advice I heard recently was, don’t panic. Rather, sit with your investment professional and review your investment strategies. Make sure your investment plan is properly constructed, suits your need for liquidity, projects to provide the desired future income, is based on your goals and objectives, and confirms your investments align with your risk tolerance.
When the market is unpredictable, one of the best things you can do is focus on your long term investment goals. A “good investment plan”, is a diversified investment plan consisting of a dozen eggs in a dozen different baskets, as opposed to all of your eggs in one basket.
Your diversified portfolio may contain stocks representing multiple sectors and natural resources, bonds and perhaps even some real estate. Ask your investment professional the difference between Treasury Bonds, Investment Grade Corporate Bonds, Municipal bonds and General Obligation Bonds and choose which combination of bonds best suits your needs.
When you hear financial experts compare what is happening today to the recession of 2008, I encourage you to take a look at how financial institutions have improved over the past decade and how the general economy is significantly more stable. Currently we are experiencing a record low rate of unemployment and wage growth is strong. The GDP (gross domestic product) is on an upswing. Yes, the building and housing sales slowed a bit in 2018, but not with the rapidity we saw in 2008. Our financial markets are functioning well. Trading systems have been refined and now operate smoothly. Buying and selling stocks and bonds happens effortlessly. Lastly, unlike the environment of 2008 and 2009, financial institutions are lending to both individuals and businesses, big and small.
The fluctuating markets may be heavily influenced by the world news. Over the past few weeks, a lot has been happening. There is a government shutdown and talk of a trade war between the US and China. Let us not forget Brexit, wars and the transitions of power happening in the US and abroad. The Federal Reserve did raise interest rates and some investors have taken advantage of selling off investments (at a loss) to offset their long term gains.
We encourage you to check your asset allocation, rebalance your portfolio and continue the course of investing for your financial future. In the long run, the multiple rise and falls of 2018’s market may not prove all that consequential over your lifetime of following a good investment strategy.
Just because your financial investments may not have grown as you hoped in 2018, don’t panic or abandon your long range plan. If you are financially better off in 2018 than you were in 2008, chances are you are on the right track to achieving your secure financial future! Are you planning to buy a home in 2019? Some areas are experiencing reduced listing pricing due to a higher than average volume of homes currently on the market. This could be your year to make the dream of home ownership a reality!
Trusted since 1979, United Northern Mortgage Bankers Limited is one of the nation’s best-managed mortgage banks. The mission of our licensed mortgage loan originators is to educate our clients on their home financing options so they can make an informed decision and receive the loan program that best meets their needs.