July 26, 2022

What should I do in this volatile market if I am in my 40s-50s?

If you are in your 40s and 50s and you’re pre-retirement years you might be wondering what you should do right now in this present, volatile market.

Tim Goodwin, Certified Financial Planner and founder of Goodwin Investment Advisory shares, “I don’t know if you are like me, but when the stock market is down between 5% – 10%, I don’t typically get that worried when I’m buying stocks, because at that point I feel like they’re on sale and I’m getting a bit of a discount. On the other hand, when the stock market is down 20% or more, the amygdala part of my brain–otherwise known as the lizard brain–starts firing all these things about fear. The amygdala is supposed to protect me and help me survive. So at a 20% drop in the market, my amygdala starts kind of freaking out and I’m not really sure what I should do or if I should keep buying stocks. I have to remind myself of the truth that the stock market has always recovered and I believe it always will, except maybe if two things happen. 1. In the case of a nuclear war or, 2. Jesus comes back. In either of those cases, I am not going to be too concerned about my portfolio.”

Some interesting information from Bespoke Investment Group is that in June 2022, we had two weeks where the stock market went down at least 5% or more consecutively. The last seven times that’s happened since 1945, the stock market went up at least 5% the following month.

Subsequently, the stock market went up over 20% the following six months, and the stock market went up over 28% in the following 12 months . I’m not sure if that will be the case this time, however, it’s always important to learn from the past and plan for the best. If you need help with your financial plan, please consider us. For more information, you can go to our website at www.goodwininvestment.com