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  • Writer's picture Treavor Dodsworth CFP®, CPA, CKA®

#16 - Stock Market Perspective


Much of the US stock market has been hitting record highs recently. Take a look at the Vanguard Total Stock Market ETF - VTI.

Source portfoliovisualizer.com - See the chart and disclosures here.

In bull markets, it is tempting to assume this is the new normal and that markets will never have another significant draw down.

I do not believe the stock market will rise indefinitely without experiencing a draw down, but at the same time, I do not believe in trying to time when the market will go down and up. See Ben Carlson’s articles below for excellent examples as to why.

Is it possible to stay prepared mentally/emotionally for stock market movement that will give us greater resolve when the storm comes (whether it is next week, next year, 5+ years) without allowing that mindset to cloud our investment decisions? I believe it is with the correct investment perspective.

Below are my initial thoughts. I would love to hear any thoughts you have as well:

  • Money is not the goal or objective but merely a tool to reach goals.

  • Remember to maintain a long term investment perspective.

  • Recognize that market movement is normal.

  • Practice separating emotions from investment decision making so that we do not let greed drive our buying or fear drive our selling.

 

Interesting Article(s) or Video(s)

A Wealth of Common Sense - The 5 Types of Market Crash Predictions

  • Fascinating look at several market crash predictions and the result if the predictions had been followed.

A Wealth of Common Sense - What Would You Have Done in 2009

  • Ben shares valuable investment perspective.

 

Thank you for reading! What investment perspective assists in preparing us for stock market movement?


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