Sequestration effect on the stock market

This post may contain affiliate links. Please read my disclosure page for more info. It makes sense on many levels. Let me answer that question with one simple word…No! I know this is easier said than done. You want to get out of the stock market now and stop the bleeding. This is a well-known axiom in the investing community. If life were all lollipops and puppies, the stock market would just continue to go up and up.

Unfortunately, there is a little something called reality and a continued, unceasing trajectory is impossible. While I may dislike seeing investment losses as much as the next person it is vital to come to grips with the fact that you will lose money when investing in the stock market.

We can never truly know what exactly is going to happen in the market. Anyone who tells you otherwise should be ignored. What we do know, however, is fear is rampant. Look at it this way. Far too many did that back in or early and missed out on the resulting upswing that many others took advantage of. The moral is not to jump in head first just because everyone else is acting out of fear.

I am not an expert at speculating on the stock market, but I do know that what goes up must come down. If you follow the media you know the stock market, and getting out of it, is something that has been talked about a lot lately. There is one simple reason why they do this — to get ratings. They have no idea what your exact situation is.

They have no idea what your portfolio looks like. While the noise can make it difficult for many to decide what to do when it comes to their investing strategy, I will say to be very careful of who you listen to when it comes to making an investment decision of your own. You are the only one who knows your specific situation and only you will care as much about your money as you do so make sure to your due diligence before listening to anyone.

This is why I simply monitor all our investments through my free Personal Capital account. If you need a simple way to monitor all of your investments, you can do so with a free Personal Capital account.

An investment plan helps you separate emotion from your investing and make a rational decision. That is key in times where the stock market it having palpitations. With that in mind, you need to know the role investing in the stock market plays into your future. Are you saving for retirement? Are you saving for a down payment for your next house? Are you saving for a college fund? There may be many other reasons for your investing, though the point is you need to know the why so you can make your decisions accordingly.

You should take a look at your overall portfolio and see if and when it might be time to rebalance it. Personally speaking, I take moments like the one we face now and let it roll off my back.

We take a lazy approach to investing and are investing for the long run. What are your thoughts on the current state of the stock market? Are you making any changes in your portfolio, or are you staying the course?

Investors need to have a long term plan and view when investing in the stock market and review that plan on a regular basis. You are going to lose money over the short term because stocks never just go up. But if you stick to your plan and ignore all of the doomsday scenarios, you will be OK.

Case in point is But if you stuck to your long term plan and stayed invested, you would be ahead of the game now, just 5 years later.

I know of too many people who after the market tanked sold everything and went to cash. They are still in cash and they still have hardly anything to show for it. That is a great point about investors cashing out in only to fid themselves with very little now. Although I believe that it will probably correct itself sometime soon, the fact is nobody knows what it is going to do.

Over the years, the stock market has always gone up over the long term. Therefore, it is my belief that you should only be putting money in that you plan on having invested for at least 5 and probably 10 years. Thanks Greg and I totally agree! Long-term investing is the only way to go, unless you want to take on some significant risk. Too many people did pull out only to try and get back in now, only to lose out on a lot of gains.

I am in the camp of not listening to the talking heads on CNBC and elsewhere and sticking with your financial plan. Rebalance your portfolio and invest for the long-term. I am in the same camp and is one that should be well thought out as opposed to jumping out of fear. I agree, those who baled are in poor spots due to missing out on those gains since It is not an all time high if you factor inflation.

And it historically rises some more. But you can get out and wait for a dip to come in again.

I agree Pauline, very few are smart enough to be able to outsmart the market and it always makes me cringe to watch investors make decisions to buy a certain stock after little to no research. My mentality on the stock market is to keep pushing money in during the highs AND lows. I hardly ever look at the charts, and I never watch the news I get my news from NPR because of their inflationary nature.

Warren Buffett beats almost all of them, but his strategy is boring to write about. Articles about why the Dow is going to hit 20, or why you should sell today get clicks and whip people into a frenzy. We actually get a good bit of our news from NPR ourselves. My wife has loved them for create select box options javascript and has turned me on to them and tend to be fairly solid.

Unless any of us can tell ahead scope of indian stock market time what the market is going to do tomorrow, then today is perfectly fine day to invest. Sure you can read the metrics and look for signs.

Sequestration Definition | Investopedia

So really the best we can do is stop worrying about what will happen tomorrow and focus on getting our act together today. Stop worrying is something that way too many people need to take to heart.

I know it can be sequestration effect on the stock market to say no to, but that worry will generally just cause you trouble. I also look towards the long term with my investing tactics. I did some research of my own and chose solid funds with low MER that have shown long term positive returns that align with my tolerance level.

The rest is pretty much out of my control. Long term really is the way to go K. I invest regularly, regardless of how the market is performing.

Every month when fresh capital hits my account, I try to find the most attractively valued stocks that fit into my investment plan and purchase them. I just look for value. All a higher market means is that there are less attractive options out there.

I find that that approach really helps take the emotion out of the investment decision and can make decisions much easier to come to. This is probably my favorite investing quote of all time.

I know people who freaked out and jumped out of the market. Fast forward to today where this index has more than doubled!

I view it as the stocks I am looking at are on sale so why not buy some? The sad thing about so many of those people is that they never made it back into the market and missed out on so much in terms of gains. I have a pretty aggressive strategy in the stock market at this point. I know that what comes up must come down, but I am young enough to absorb those losses. If I was older, I would take a more proactive approach. It happens all of the time. I am taking a similar approach myself and agree that if I were older I would be a little more conservative.

I think we all turn into our parents a little bit as we get older. Rental properties are great, they bring greater diversification. I agree with a lot of the comments here. When you try to time your purchases to the market you end up getting burned more gra forex demo than not.

Slow and steady broker platform stock trading flooring the race. Great point Nick…slow and steady does win the race. I think each person has to customize his or her own strategy based on a host of factors—age, income, retirement ambitions, savings, etc. Reporting stock options on 1099 we are sellers.

Two bubbles followed by two crashes sincefollowed by another steep world series stock market indicator in progress —my vertigo tells me to look elsewhere for investments more appropriate for our circumstances.

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Your investing needs to be based off of all those factors in order to make them right for you. They have their own personal goals, risk tolerance, etc. Knowing what you want your money to do for you when will you retire? What will you do in retirement? Buy a home, pay for kids colleges, etcand following a well-though out plan and how to make cash registers homemade strategy is what will help you achieve your goals.

I agree that each investor has their own unique situation and need base their decisions off of that as opposed to what the pundits suggest you do. I dollar cost average so the ups and Downs will balance out in the long run for a hopefully steady increase!

DCA is a great way to go at it Lance, as it can help take the emotion away and have a course to follow. Jumping just out of fear will get you nowhere in the end. A good dip in the market would allow us to invest at lower rates. Timing the market is a waste of time. You usually end up having the opposite effect that you intended. A pullback, to some extent, would be nice and one that would be good to take advantage of. If it goes down I can buy a little more for the money, if it goes up I can buy a little less.

Those ebbs and flows are to be expected and sequestration effect on the stock market just a part of investing in my opinion. When I did, I lost money. Those that got scared by the crash of and pulled out of the market missed one of the biggest comebacks in market history. The market fully recovered in about 2 years so if you missed just part of that, you never recovered your losses.

I use dollar cost averaging so I buy more s&p 500 index options volatility when the markets are down and less shares when price are higher.

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Rebalancing quarterly helps to keep sector risk balanced. Of course if you are less than 5 years to retirement you should be moving towards a more conservative mix. John, great post, and yes I have made some changes to my portfolio. I had 3 bond funds that have done pretty well, paid a nice dividend. I got out of those and going to put that money into a self-directed IRA to buy cattle.

That said, great way to get some good diversification. Everyone has to start somewhere I guess. I think we may start saving up to invest in the real estate side maybe buy some investment properties for long term.

Sounds like a good plan Mr. I am trying to be more cautious as everyone else gets giddy. I think its always good to do the opposite of conventional wisdoms but still invest a healthy percent in equities no matter what. Being cautious while everyone is ecstatic is a great way to go in my opinion. Great point about what goes up must come down. There are always too many bulls offering advice when the market is flush. Even the great financial guru Mila Kunis is touting stocks right now.

Lover her in The 70s Show, but not as a source of financial wisdom. Hopefully, when the market corrects, it will not drop so much that people lose their original investment amounts. Lol at Mila Kunis!

I saw a headline about that the other day and it was just too stupid for me to read. I agree, hopefully the market will not contract too much as investors have been through an awful lot in the last five years.

If I was to do anything it would be to maybe review your portfolio allocation a little more frequently and re-balance accordingly. Obviously depending on your acceptable risk levels and age, market changes might mean more to you in the short term.

I am curious about how a market that seems to be reactionary to the global economy compares in volatility to earlier eras that maybe were not as globally connected or reacted slower. You bring up a great point about the reactionary nature of the market.

I would probably say that it was not as bad decades ago as news is instant today and reaction falls in kind. Then again, I could be completely wrong in that. We are not changing anything right now with our investments. I think the downs are a little easier to diagnose though.

We follow a simple plan of continuing to invest through the ups and downs mostly because our time horizon is so far out. The market has been absolutely amazing this year. It has weathered all of the government dysfunction from the fiscal cliff to sequestration to shut down. We still go higher. There is no rationale to the market. It is completely psychologically driven. Right now everyone is a cheerleader, but hold on when the music stops.

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Booz Allen stock suffers in anticipation of sequester

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Is it Time to Get Out of the Stock Market? Posted on January 20, by John Schmoll in Investing. If you enjoyed this post, please consider subscribing to the RSS feed.

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