Dear Young Investor
Whether you're just starting your investing journey or haven't taken the first step yet, know this: an early start is the single most important thing you can do.
Whether you're just starting your investing journey or haven't taken the first step yet, know this: an early start is the single most important thing you can do.
Stock market corrections are normal and to be expected unless they happen. A lot is unfolding quickly and feeling anxious is normal. Succumbing to the panic is not a good strategy but when these market swoons happen, it is always productive to have perspective.
There have been two very powerful investment truisms that have been reinforced since LCV Advisors’ launch. These are the power of staying put and keeping it simple and they continue to be major drivers for successful investment outcomes.
There's been little room to hide in investing year ’22, with twists and turns like the highest inflation in four decades, double digit losses in both stocks and bonds and a war in Ukraine to name a few. Just like scary driving reps eventually make one a better driver, investing-wise, you must survive a lot of scary, volatile headlines and headwinds in the short run to achieve success over time.
I’ve learned a lot in my investing lifetime especially through many recessions. One of the most important lessons is that when everyone seems to be on one side of the sentiment boat, it’s important to maintain perspective so that your behavior doesn’t give in to the seduction of pessimism and capsize your investment plan.
Let’s dig into the two key questions after the recent bout of bond price declines. First is what just happened to the value of my “safe, less volatile” bond investments in my diversified portfolio? The second is what is the outlook for a typical 60/40 stock/bond portfolio after this kind of slump?