When stock prices are going down, the value of companies goes up.
Think of it this way: a declining market can be thought of as a “sale”… and aren’t sales always temporary? The lower prices go at your favorite store, the more valuable the products. Applying this simple equation to the stock market will help provide confidence or preparedness.
Riding out this temporary market decline is one way to reap the rewards when it inevitably bounces back.
It is not possible to perfectly time your way back into the market if you sell out. In my opinion, one way to ensure long-term financial independence in your portfolio is by staying put.
Do not let short-term disruptions hamper your long-term goals.
At Falbo Wealth Management, we have provided you with a tried-and-true blueprint to pursue all of your retirement goals independently. The key ingredient to this plan is staying consistent in your investments.
Do not look for “quick fix” alternatives.
Perhaps more today than ever, bonds, CDs, and the like are not an alternative. At the moment, the cash dividend of the S&P 5001 is close to three times the yield on the 10-year Treasury note.2 Even if dividends were to halve in the current crisis, and interest rates stayed where they are, stocks would still yield more than the 10-year Treasury. I’ve never seen that before, and when this crisis passes, I don’t ever expect to see it again.
With so much uncertainty in the world, it’s only human nature to waver occasionally in your investment strategy and financial planning. If so, you may wish you could get an objective second opinion from someone you can trust. I hope you’ll know me to be that friend.
Joseph F. Falbo, CFP®, AIF®, CRC® is an independent LPL financial advisor that helps grow and preserve clients’ wealth using cutting edge, customized, and comprehensive strategies. With over two decades of experience, Joe helps clients to pursue and retain the lifestyle they want in retirement. To discuss your retirement goals or any financial topic you want, schedule a 20-minute complimentary call. To learn more about Joe, please visit falbowealth.com.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.