Cents and Sensibility
Cents and Sensibility
As the horrifying events surrounding the Sept. 11 attack on the United States gripped the nation, financial matters were not the first priority. Peoples' thoughts and concern were with our nation, and particularly with the victims of the tragedy and their families and friends. Stay course in investing
to weather world crisesSince the reopening of the New York Stock Exchange on Sept. 17, individual investors have faced an uncertain investment market with many unanswered questions about their own investments.
As an investor, what should you do? During periods of uncertainty, it's more important than ever to remember the basic rules of successful investing.
Stay the course. Once you have determined your long-term financial destination and have plotted a course to get there, it's vital to stay on track and keep moving forward. It's natural to react to recent events with fear and uncertainty. But don't give in to the temptation to make hasty investment decisions. Despite the tragedy, the world's great companies will continue to produce the goods and services needed internationally. Historically, the market has declined for a short time in the aftermath of world crises, but it has traditionally returned to normal after the shock subsides.
Stay invested. Now is not the time to get out of the market. Sadly, there have been other national tragedies in the past, although none as horrific as the events of Sept. 11. Thankfully, we live in a nation that is resilient, and the financial markets have historically reflected that.
Stay with quality. Stocks issued by companies with histories of solid growth can endure periods of market uncertainty and continue to grow in value.
Stay diversified. Portfolio risk can be reduced by spreading your investment dollars among a variety of investment types, including stocks, mutual funds, bonds and other investments. By owning a variety of investment types, your portfolio will be well-positioned to weather most market crises.
Stay focused. When it comes to investing, long-term performance is what counts. It's difficult not to dwell on the recent tragedy; but, with regard to your investments, it's important to look forward.
Stay calm. Investment decisions should never be made based on emotions. Rather, they should be based on long-term needs and goals.
By following these timeless investment rules, you can stay the course during even the most turbulent market and reach your long-term financial goals as planned.
Guy Steele is a financial planner and head
of the Pali Palms office of Edward Jones. Send
planning and investing questions to him at 970
N. Kalaheo Ave., Suite C-210, Kailua, HI, 96734,
or by email at: gsteele2@pixi.com