Market Volatility

The markets have been pretty wild lately. It doesn’t matter when this was written or when you read it. The market has always been unpredictable. The obvious question then is, how to deal with the uncertainty and risk.

The direct answer is, your focus for investments should be long term. By long term I mean distant horizon with no deadline or target date. In the past, we’ve discussed charting and options. Both are trader subjects and trader is a nice way to say gambler.

It might be fun to flip stocks and play options but that should be done with fun money that you can afford to lose. Because you will. Elections come around every two years and the big ones every four. Big world events will always push the market around. It gives the talking heads on T.V. something to talk about. It gives the hedge funds opportunities. They’d all be floating belly up if the market was stable and predicable.

That brings us back to our serious money that we don’t want to lose. If your focus is long term, you can ignore market craziness. I’ve said this before but it’s worth repeating. Ignore the waves, ignore the tides, and focus on the current. It is consistent.

If you have a target date for when you will need your money back, better to stay away from the stock market.