The Market is in a Bit of a Slump. Time to Dump Your Stocks?
The stock market is going through what many analysts and economists like to call a "correction." After quite some time of bullish (upward moving) behavior, the markets have seen some slowed growth the past few months. For stock investments, this is quite normal and expected. Markets run in cycles, and another interest rate hike by the Federal Reserve is likely to keep the stock market on the slow-growth track. But is it time to sell? Not necessarily.
The stock market is about the long haul
No matter how things look in the short term, over the long run, investing in stocks usually pays off. The key is finding good companies with the potential for growth, and sticking it out when the market as a whole is a bit slow (a company that doesn´t grow along with the rest of the market during bullish times, though, could be a red flag). Figures, returns, and just about every economic and financial indicator out there shows that you will come out ahead when you invest in stocks during the long run. The periods of growth usually more than make up for periods of decline.
The silver lining of a slump
While you should evaluate your portfolio and determine which stocks are most likely to grow, and maybe make a few changes, by and large you are probably okay with where you are at if your investment accounts and retirement accounts have been doing well to this point. Besides, with the slump you have a chance to really capitalize on the current market. Prices are likely to go up (though not certainly; stocks carry the risk of losing it all), so that means that you are buying more stocks through your various investment and retirement accounts, and when the market heads up again, you will be sitting pretty.
The disclaimer
No matter your involvement in stock investing, it is important to remember that all investment carries risk. Some investments have lower risks than others. Stocks are among the investments with higher risks. So, while it is likely that you do well to invest part of your assets in stocks (though not all-but diversification is a topic for another day), it is by no means certain. That´s why stocks are among the most profitable investments; they carry the highest risks, and no one really knows where a stock will go next.
