The market is volatile, and the highs right now are much different from the lows last December. Will the market continue to climb up, or plummet, or stay flat, or bounce around? No one knows. There are theories of course but no one really knows. Here are a few investment ideas for how to maybe handle this current environment.
• Markets bounce but historically they recover when they bounce down. Long-term investors may consider just staying the course. Retired investors or those needing to take money, are more affected by the volatility. All investors are not the same so consider your specific needs and ability to handle the bounces.
• The entire point is to buy low and sell high so if you have investments that have soared up and are overpriced, consider capturing those gains by selling and investing in something new that has more room for growth. No one wants to sell the investments that have done great but that is how you make money.
• Even outside of a recession or correction, there are a lot of signs that growth is slowing down. This is part of a normal economic cycle. It means though that growth investments that have done well in the past may slow down. Consider swapping out growth-focused stocks for dividend-focused stocks.
• Be careful to make future investment decisions based on past performance at this point in our market/economic cycle.
• Diversify your investments by including a healthy percentage of utilities, energy, real estate, and dividend-paying stocks, including preferred securities. Even if the economy doesn’t grow, people still need to pay rent and have electricity and buy diapers. They will continue to go to fast food restaurants and drink soda and watch tv, even in a recession. Interest-rates may be down for a long-time so these investments may also be utilized as bond-substitutes for generating income.
By Cammie Humke, Investment Adviser at The Humke Group, Inc Located at 555 S. Randall Rd #103 in St. Charles, IL, phone 630-584-7343
The Humke Group, Inc is an independent firm. Securities offered through Cetera Advisor Networks LLC, member FINRA/SIPC. Advisory services offered through Summit Financial Group, Inc., a registered investment adviser. Summit and Cetera are affiliated and under separate ownership from any other named entity. Member of FINRA/SIPC. Market Commentary: The views stated in this letter are not necessarily the opinion of Cetera Advisor Networks LLC and should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results. Investment Risk: All investing involves risk, including the possible loss of principal. There is no assurance that any investment strategy will be successful. A diversified portfolio does not assume a profit or protect against loss in a declining market.