Scary Market, Yes, but Keep Cool, Investors

In this Sept. 24, 2013 file photo, a sheet of uncut $100 bills is inspected during the printing process at the Bureau of Engraving and Printing Western Currency Facility in Fort Worth, Texas. Nobody knows when exactly, but the day will eventually come when the Federal Reserve nudges its benchmark lending rate from next to zero to something slightly higher. But that doesn’t mean the era of incredibly low interest rates will be over. (AP Photo/LM Otero, File)
AP Photo/LM Otero, File)

Robert Powell, USA TODAY

(USA Today) — Don’t panic. Yes, the stock market is in a free fall with no end in sight.

But now would not be the time to head for the exit doors, say experts.

“Regular folks should take on a long-term view and avoid trying to anticipate short-term market movements,” says Stephen Horan, the managing director of credentialing at CFA Institute in Charlottesville, Va. “There is almost no evidence to suggest that professionals can do it effectively and a plethora of evidence suggesting individuals do it poorly.”

Now would, however, be the time to re-evaluate your current asset allocation – what percent of your money is invested in stocks, bonds, and cash – against the asset allocation you deemed appropriate when you created your investment policy statement.

If it’s out of whack, then and only then, might you consider selling and buying. Otherwise, now would be a good time to do nothing, unless of course you don’t have an investment policy statement – a blueprint – for your investments.




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