Stay the Course?

You’re generally not going to get market commentary here, but the big stock market downer today bears at least one note.

The stock markets have been and, in my opinion, continue to be the right place to save for the long term.  I realize that for some folks, long term planning is deciding where they’re going to lunch, so let me clarify that if you might need money in less than five years, stocks – including stock mutual funds and ETFs – are not the place for that particular money.  Your stock holdings should be diversified – mutual funds and ETFs representing a variety of industries and geographies can fit the bill for most. 

If you haven’t been putting some savings into conservative (downright boring) investments like money market funds or a savings account, start doing that yesterday.  Have some money in some other interest earning (almost as boring as money market and savings account) investments like corporate grade or US Government bond funds.

If you’ve put all your eggs in one stock basket, this might not be the best time to drop the basket on the cold, hard sidewalk and run for the hills.  If you’ve been a do-it-yourselfer, it’s worth the fee to get a good advisor to help you make some decisions based on your particular situation.  Sometimes letting things level out with your existing holdings and getting started on a new routine with your future savings can be a good strategy to minimize long term losses while getting on the right path. 

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