Stock market red … what does it mean? A simple explanation.
GENERALLY SPEAKING INVESTMENT IN THE STOCK MARKET SHOULDN’T BE SEEN AS A SHORT TERM VENTURE. THE REALITY IS THAT THE MARKET RIDES THE WAVES OF THE WORLD’S POLITICAL AND FINANCIAL INFLUENCE ALL THE TIME.
It’s human nature that when the stock market is strong investors feel on top of the world and when the market takes an inevitable hit, investors are anxious and bleak. But the reality is that the only market that should matter to investors is the one when they are buying or selling.
For those investors in for the long haul the current lull between waves represents an opportunity to make educated decisions around buying into secure stocks that are now offering more bang for the buck. Some blue chips are now at a point where they offer a margin of security and will likely continue to provide attractive dividends while in time re-gaining their current lost value.
So are we entering a longer term slump? It’s the $64,000 question. We don’t know. But what we do know is the recent interest market movements are owed largely to a rise in US interest rates and the longer term issues of potential trade insecurities that may weigh on the global economy.
So the message is hang on. Ride out the storm and look to the long term. If you’re planning to buy, talk to your Adviser about secure stocks that meet your requirements and objectives. Most importantly the stock market is a long term investment - plan for your money to be tied up for a minimum of five years.
Craig Benham is a Principal at Forsyths.