If you're an investor, you may have been disappointed with how the markets have been reacting this summer to the news of high oil prices and other short-term events. Nonetheless, your long-term financial goals don't have to be jeopardized by these losses - if you know how to respond to them.
Here are a few moves to consider:
- Stick to your investment strategy.
It's almost always a bad idea to make long-term investment decisions in response to short-term market fluctuations. If you have built a diversified portfolio of quality investments, you're better off just "staying the course" during a market decline. (Keep in mind, though, that diversification, by itself, cannot guarantee or protect against loss.)
If these investments were suitable for you before the market drop, they'll still be appropriate when the market turns around.
- Don't try to "time" the market.
It would be great if you could know when the market had reached its low or high points, or which days would be "losers" and which ones "winners." If you had that foresight, you could always jump in and jump out of the market at the right times. Unfortunately, no one can make those predictions with any accuracy.