Why Investors Should be Optimistic and Stay Committed to the Plan

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Published by Taylor Financial Group

There’s no denying that we’ve had our fair share of volatility lately.  In fact, the last time we saw this much volatility was during the financial crisis.  But we expected some volatility for 2018, especially since 2017 proved to be one of the least volatile markets since the mid-60s.  It was bound to happen after 110 months of a bull market.  That inevitability, combined with all the political drama so far this year, has created a little more volatility than predicted.  The good news is that we anticipate a strong earnings season and, therefore, despite all the drama, investors have reason to be optimistic.

Strong Earnings Season

Earnings season kicked off last week and, given the consistent growth in the S&P 500 Index, most economists expect another strong quarter.  There are several reasons why folks are expecting a boost this quarter, including the robust U.S. manufacturing activity, strong global economic growth, and the new tax law.  In fact, LPL Research expects that companies will begin to announce their plans regarding how they will use their tax law proceeds.  Investors will likely begin to focus their attention on strong company fundamentals and corporate profits over trade headlines, which should also help stabilize stocks.  Ultimately, we should all expect some more volatility, since the forecast is of earnings growth of 15% year over year.

Stay Committed to Your Plan

We know volatility can be intimidating.  It could cause you to question whether you should switch up your investment strategy or revise your portfolio.  And, don’t get me wrong, sometimes volatility can present some opportunities for investors.  But one of the most effective ways to deal with volatility is to stay the course.  Don’t let yourself become anxious.  Moving money around out of fear or chasing stocks for better performance could ultimately take you off track and hinder you from pursuing your long-term goals.

If you’re feeling anxious about the markets or have questions about your portfolio, give us a call.  We are happy to answer your questions and help ease your fears.

 

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