In case you missed it, the markets were just horrible today. Don’t look – most of the stocks are in the red. Unless you were hiding under a rock (hey – no judgment, I get under a rock sometimes too), I’m sure that you now know that on June 23rd, British voters approved a referendum to leave (or exit) the European Union (EU), hence Brexit. We touched on this very briefly last week. Here’s what’s important to me when I think about the effect on the stock market:
- European banks crash – really bad for European markets, and the impact is surely tied to global markets and thus US downward spiral
- The British pound (currency that is) fell to its lowest level in decades – currency markets heavily affected (and now it will be cheaper to go to London)
- Prime Minister, David Cameron, who supported the UK remaining in the EU, announced he will step down in October of 2016 – political instability leads to market fears
- The US Federal Reserve will probably not raise interest rates any time soon – stock market gets very jittery
Notice the common theme? Markets are crashing around us. It will take time for the markets to figure this one out.
All of the chatter can make you feel as if the best place for your money is in a savings account.
Trust me, flocking to safety is a direct result of fear. Flocking to safety can sound appealing in the short-term, but over the long-term, sticking to an investment philosophy that can withstand market turbulence is key.
Now, “short-term” and “long-term” mean different things to different people, so I’ll let you decide what’s best for you. One of the best pieces of advice I got is when I was working at JPMorgan and picking stocks for a living, came from my portfolio manager (thanks, Jonathan), and he said to me – “Charisse, in times of market uncertainty, sometimes you got to wait it out and sometimes you got to seize opportunity.” His words ring true today.
So, before you BREX yourself from the market (or exit), check in with your financial advisor, revisit your investment philosophy, and develop a plan to wait or act.
Top 10 Charisse Sayings Over the Past Year
I promised you I’d get you my top 10 rules to live by, which I’ve accumulated over the past year. In honor of the one-year anniversary, I want to share these with you. After all, I do care about you.
- Be the CEO of your money – Your true badass self
- Don’t be afraid of the stock market – it has historically returned almost 7% per year annually
- Make someone else hold you accountable, your Money COO
- Always date your financial advisor
- Allocate less than 20% of your gross income to debt repayments
- Take advantage of dollar-for-dollar matching when offered by your employer.
- You can invest outside of your 401k on your own – brokerage account and/orroboadvisor is a good option
- You cannot time the market - Don’t try
- Get a Roth IRA if you can swing it
- Diversify your portfolio and get low-fee products to help boost your returns over time
Happy week! Keep that head up.