Happy New Year!
Markets are closed today to celebrate the holiday. But in the spirit of the new year let's reflect on last year and the lessons learned.
Markets have been on a tear sense the election. We are certainly due for a market correction. On average the market corrects at least 10% once or twice a year. But this does not mean the end of the world.
Stock markets started 2016 with about a 15% decline. It was the worst start to a year on record. But despite that record bad start to the year, markets gained double-digit returns for the entire year.
Lesson learned? Investors don't try to time the market, they believe in time in the market. We always say the market timers Hall of Fame is an empty room in Paducah Kentucky. It is almost certain that someone that sold in January 2016 and went to cash got back into the market later at a higher price. Not a good move.
Having a high-quality, well diversified portfolio is the answer to these corrections that inevitably come and go.
Make this your wealth building new year resolution. Don't try to be a market timer – be is smart investor and ride out the rough patches and be rewarded.
With Northwest Quadrant Wealth Management, a Registered Investment Advisor I am Troy Reinhart.