August 05, 2016
The stock market crash of 2008 shook even the most strategic investors. Major financial markets lost nearly a third of their value, the Dow Jones industrial average dropped more than 50 percent in less than 18 months, and the equities market fell more than 40 percent. This was an extreme example of volatility in the stock market, though it was hardly an isolated event, says Timothy Dreiling, CFA, Regional Investment Director for The Private Client Reserve in Kansas City, Kansas.
“There is always some manner of uncertainty creeping into the market, and uncertainty causes volatility.”
Since 2008, many triggers of volatility have occurred in the market, such as the collapse in the price of oil, the Federal Reserve’s interest rate stance, the Greek economic crisis and the United Kingdom’s decision to exit the European Union.
Not to mention the impact of elections, slow wage growth and a host of other social, economic and political events that impact the global marketplace.
It’s easy to let events produce fear or lead to impulsive decisions. However, we suggest you keep these recommendations top of mind to avoid “The Cycle of Investor Emotion.”