With the Gyrations in the Stock Market, is it Still Important to Invest?
Fears of a major and long-lasting crash in the stock market have been replaced — for now — by news about the Ebola virus. Nonetheless, the recent turbulent run has some people concerned about their investment holdings.
“There was more market volatility last week than there had been in almost three years,” Washington Post columnist Catherine Rampell wrote.
Despite the down Dow, she says, other data indicate that the economy is doing fairly well.
“Explaining or predicting market movements is a fool’s errand,” Rampell wrote. “Animal spirits, ‘thought viruses’ and other voodoo can dissuade markets from behaving in ways that reflect the underlying health of the economy. Which is why I suggest not getting too spooked by the stock ticker.”
Still, last week’s Color of Money Question was: Have the recent gyrations in the stock market got you worried?
Sandy in northern New Mexico said that, nope, she’s not scared. In fact, she considers this a good opportunity to buy: “I moved up my next monthly IRA contribution to take advantage of the downturn, my small version of market timing. LOL. Normally I just make monthly contributions without worrying about it.”
Jason Stevens of Owings Mills, Md., did the same. He wrote: “For long-term investors, market corrections (and even volatile days) represent buying opportunities. It’s like a sale at Nordstrom, only better because instead of buying stuff, you’re investing in your future.”
Another reader, Fred, had a different take on recent stock market events and the media’s characterization of investors. He wrote: “I very much dislike stock market articles that basically have the word ‘panic’ in their headlines and then go on and imply that those of us who see our nest eggs (that we have contributed to for decades) reduced by double-digits are scared, greedy nitwits who are the cause of all this doom and gloom. I am 55, and for me it is both discouraging and depressing that even blue chip stocks . . . are literally reducing my retirement funds by thousands. You preach to us that we should scrimp and save, but what good is it to clip coupons to save a dollar on detergent or a can of soup, when it is dwarfed by losses that could have at least gone for something useful, like replacing my 12-year-old car. Sure, we can say the market will rebound, it always has, but that doesn’t do anything for the pit in my stomach and the feeling, ‘Well, here’s another year I’ll have to put off retiring.’ ”
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Source: Washington Post