Is This a Market Correction, or Something More?
Markets tend to move in cycles—is your portfolio prepared for the next turn?
It’s been a bit of a roller coaster ride for the stock market recently. On Friday, February 2nd the Dow Jones Industrial Average dropped 665 points, and on Monday it fell more than 1100 points. Then on Tuesday, it sank 567 more points, before ending the day up 567 points. On Thursday, February 8th, the Dow took another 1000 point nosedive. After an extended bull market of almost 9 years, the stock market is finally showing some cracks.
It sure has been an interesting ride. The market has drifted into a “correction” - typically defined as a 10% decline in the market, but no one can be certain what’s next. Stock market volatility like this - including market corrections - is not unusual, but it can make investors uneasy.
Truth is, volatility is a fact of life in the investment world. With dramatic stock market swings and bond market volatility like we’ve seen recently, you’ll see pundits, advisors and other experts advising investors to stay the course, and not panic. At Millennium Trust we do not provide investment, tax or legal advice, but I do encourage everyone to take a deep breath, consult with your advisor, and continue to focus on one of the core tenets of virtually any long-term investment plan: asset allocation.
It’s a theme that we at Millennium Trust have been talking about quite a bit lately, too. In a recent newsletter, for instance, we discussed how asset allocation for large, institutional investors differs from typical individual investors.
Alternative investments, including real estate, private equity and more, are becoming more mainstream. Various investment platforms, including those listed on the Millennium Alternative Investment Network®, are helping to make alternatives accessible to individual investors, sometimes with lower investment minimums. Alternatives can play an important role in a well-diversified portfolio, as they can perform differently than stocks and bonds.
Remember that stock market volatility is a normal occurrence. Even though it can be disconcerting, it can also be an opportunity to work with your advisor to reevaluate your investment strategy. Work with your advisor to make sure that your portfolio asset allocation is aligned with your overall goals, and consider how alternatives may help you attain a truly diversified portfolio.
The material in this blog is presented for informational purposes only. Millennium Trust Company performs the duties of a directed custodian, and as such does not sell investments or provide investment, legal or tax advice.