Markets are in Correction Territory
With a 10% drop for the markets in 6 days, this week reminds us of September 2008. In fact, this week is the worst week since the financial crisis.
If the markets have you feeling a little uneasy, we have a few things for you to keep in mind. Remember, markets generally have a 10% correction each year on average. The last correction was in the fall of 2018, which was a 19% drop, followed by a furious recovery in the winter/spring of 2019. Consider your personal returns - unless you are aggressive, your portfolio is probably down less than the market. Consider your time horizon - when will you need this money? If you are still in accumulation mode, you may look at this as a time to be opportunistic and invest more. If you are in retirement mode and depending on your portfolio for income, you may look at things differently - but will you actually need to be selling any of your stocks to fund your income this year? Also, has this correction put your retirement goals at risk? Has it caused the results of your analysis on planwithpeak.com to suffer? We recommend trying to think "big picture" and understand although painful, these are the ebbs and flows of the market.
Times like this are why we speak carefully with everyone about the appropriate risk tolerance for your portfolio before a big drop comes. If you feel like your risk tolerance may have changed, please take a new quiz here.
Finally, if you would like to speak with us, we are here for you! Please call us at 734-681-7575.
EP 078: The 2020 Market Correction is Here
Nick Hopwood, CFP® of Peak Wealth Management joins The Michael Spath Show on WTKA to discuss how this has been the worst weekly drop in the market since September 2008. They also dive in on how someone knows when they are ready to retire and how important it is to understand personal behavior spending.