Boring Market

Anyone who has read the newspaper, turned on a television or surfed the web in the last year has heard about our economy and the potential state that it is in. The same gloomy pundits report about the same stories all which are surrounding the infamous “R” word, Recession. I say enough is enough. The question isn’t about if were going into a recession or not, the question is what are you going to do about it.

Any major event, or rumor can make an already volatile stock market fall off its hinges…and that’s a good thing. The stock market is strange beast that few understand and most will never begin to, so when a well run company’s stock plummets people scratch their heads. The key is to see opportunities in rough times. These opportunities are a chance to step back and evaluate one’s portfolio. To take the time to assess one’s level of risk they are willing to handle and the lack of diversity of their investments. The majority of people I talk with have all their assets in cash or certificates of deposits, and are curious about entering the market. In the same way, others panic and pull out of the market liquidating all their stocks while takes all the losses.

Only fools rush in…or out of the market. Investing is only for the patience, the cautious and the informed. It is easy to get swept up in the movement of stock market, to ‘buy and hold’ stocks without much thought or to place market orders to get your stocks out of the game. Such radical behavior often mirrors the radical swing of the market, which could cause you to lose a lot of money and cause you to blur the lines of investing with blind speculation. Before doing any radical behavior question why, and then see what the answer is. If you are going to buy a large sum of stock in a company you heard about online, why? If you’re going close your all your accounts and bury your money in a coffee can, why? If the answer is based on rumors, or fear your acting foolish. Doing the necessary homework is important because the investor must always understand the investment and the consequences associated with having a radical behavior.

You must always invest…even if it’s not in the stock market. Investing isn’t always referring to putting money into the stock market; it is referring to growing your assets. It is critical to take into account daily needs before deciding to place income into any investment. However, in order to take care of needs in the future it is important to balance your portfolio between accessible cash and well thought out investments. Being diversified helps edge risk, while expanding personal growth. Having all your money in cash is just as bad as having all your money tied in the stock market, though instead of losing money on a speculative company your money gradually loses value through inflation and a weaker dollar.

Tags: Inflation·invest·Market·Recession·Stock