2016 has gotten off to a very troubling start with stocks tumbling and investors all over the world worried to death. Fear is running so strong you can almost smell it. Times like these are very dangerous, not so much because of the risk of investment losses, but because hardwired behavioral “herding” tendencies that these conditions induce can distort thinking and prompt poor decision making that can cost investors big. While the market drops are gut-wrenching, it is very important to remember the long-term perspective: over time, stocks generally rise, and that the profit potential of stocks is a critical need for most investors.
This has been a very compressed, scary drop. I don’t know if we are quite at the bottom yet, but I strongly believe these things:
- The market and the U.S. economy are not going to zero—in fact, I expect both to show additional strong gains this year.
- The bull market in stocks is not over, and I expect further gains and new record highs later in 2016.
- Stocks have gotten attractively cheap; this represents a strong buying opportunity for those with cash to put to work for a while.
- This is but a mere dip in the long-term stock trend. The future will bring much higher stock values and profit for those who can control their fear, take the long view, and stay the course.
Try to stay calm, and remember past periods like this that you have lived through—and eventually profited after. If you need us to talk this through, call or email whoever at Camarda you are most comfortable with. I can be personally reached at firstname.lastname@example.org, or on my cell, 904-813-5034.
P.S. Look for a longer email next Tuesday on this topic, and some changes Camarda is developing to address opportunities and designed to better manage the investments future.