In light of recent media reports on stock market performance, political issues, scandals, and other ‘news-worthy stories,’ keeping yourself removed from media as much as possible may be right for you and your investments. Every day the American public is exposed to media stories that can negatively impact them and their investment decisions. During the last recession, the media’s reporting caused widespread panic as millions of Americans chose to liquidate their accounts out of fear of ‘losing their money.’
As we approach a possible secondary recession, remember that liquidating shares in a downward market can cause financial harm you may not fully recover over. It is up to you to investigate the validity of the news story and source and consider how expensive market information is if you react prematurely to it. Together, we can determine an overall plan for your investments, re-examine your goals and plan accordingly.
The relationship between percentage changes and basis points (BPS) determines a change in a financial instrument, such as the stock market and bond yields. The Basis Point (BPS), is used to calculate changes in interest rates, equity indexes, and the return of fixed income securities. Regardless of daily BPS movements, a recession is when the economy declines significantly for six or more consecutive months in five key economic areas: Real Gross Domestic Product (GDP), income, employment, manufacturing, and retail sales. According to some economists, we are entering into a recessionary period as indicated by an inverted yield curve. The question is, how long will it last and are we truly entering a recession?
When it comes to money and investing, be diligent on how you choose to react. Many media reports are non-biased, while many others are biased. If you’re concerned about financial implications related to what’s being reported, have a conversation with me regarding your portfolio. Consistent investing in a down market can yield rewards later when purchasing shares at a reduced price. The only caveat is if you need to liquidate shares during a down market and recessionary period.