For some investors, the financial and emotional wounds incurred by that event have healed. Before increasing their exposure to stocks, however, wise investors should acknowledge a couple of realities. First, financial markets can change direction quickly, and the timing and magnitude of those changes are unpredictable. Second, resisting our emotional tendencies is not easy, especially when it comes to investing.
It is impossible to predict what will unfold over the next few months or years. Stocks could continue to rise for some time or the rally could get tripped up by some unforeseen economic or geopolitical event. If you are planning to commit new money to stocks, do so as part of your long-term investment plan and make sure you’re emotionally and financially prepared to ride out the inevitable downturns.
John Spoto is the founder of Sentry Financial Planning in Andover and Danvers. For more information, call 978-475-2533 or visit www.sentryfinancialplanning.com.
This article is for general information purposes only and is not intended to provide specific advice on individual financial, tax, or legal matters. Please consult the appropriate professional concerning your specific situation before making any decisions.