Experts Offer Advice About Ailing Stock Market
To view our videos, you need to
enable JavaScript. Learn how.
install Adobe Flash 9 or above. Install now.
Then come back here and refresh the page.
The stock market may be causing some panic lately, but some experts say that it may be best to relax and ride it out. NY1’s Tara Lynn Wagner filed the following report.Over the last few weeks, Wall Street has been on a wild ride. With daily fluctuations in the triple digits, checking on the portfolio can make even the most passive investors panic.
However, Eric Schurenberg of the Fiscal Times says that the average investor should just relax.
“Do something constructive. Do anything. But don't do what your mind is screaming at you to do right now, which is sell, sell, sell,” says Schurenberg.
As Michael Goodman of Wealthstream Advisors explains, today's arrows have little to do with the average person's ultimate financial future.
“Are these my stock prices? No. If I'm retiring in 20 or 30 years, or I'm 20 or 30 years old, my stock prices are some point way into the future and this doesn't mean anything to me,” says Goodman.
“We're talking about you. You with your 401k. You with the IRA. You with the money in your kid’s college education fund. What happened in the past nine days is scary as all get out, but it doesn't really affect your financial goal,” says Schurenberg.
Granted, it's hard not to worry about it, but rather than see the glass as half empty, experts say to try looking at this time as an opportunity to refill that glass for less.
“If you're a young investor and don't plan to touch the money for 10 to 20 years, this is awesome,” says Goodman. “The market is actually on sale for you. For some reason, the stock market is the only thing people don't like to buy on sale. If tuna fish is on sale four cans for a buck, we stock up. The stock market goes on sale, we want to sell for some reason.”
While he says it's best to be patient and ride it out, Schurenberg adds that it's also okay to sell a few losing stocks since that can lower tax bills next April.
“Uncle Sam is the one who got us into this problem in the first place, you should pay him a little bit less for the trouble,” says Schurenberg.
Finally, Goodman says, any minus signs right now are really only on paper. He warns that pulling money out of the market will make those red arrows very real.
“When you sell, you lock in your loss. It's done. It's over,” says Goodman. “And experience tells me that you won't get back in again until it's much higher, and in that case you'll have missed the whole upside.”