W. Edward Newton Jr., CPA, CFP (R) | 13850 Ballantyne Corporate Place, Suite 500 | Charlotte, NC 28277 | 704-552-8689

 

Don't Let Day to Day Stock Market Swings Cause You to Lose Your Focus

 

We are in the midst of a classic capitulation with the last hour of trading yesterday going into a tailspin as selling triggered more selling. In the news, there were reports of the fall of an Iraqi town, how the noose tightened in Kobane, and medical news resulted in fears of Ebola rising.

 

None of this news is economic, yet they are overwhelming the rational reasons for owning stocks. This is hysteria at its best, the fear is real, and very few people are immune.

As an investor, I have seen this movie before. I know that at some point, stocks will find a bottom which make a great entry point. However, trying to find a bottom in fear and panic is a tall task, preferably made easier by using the so-called fear index, VIX, a spot where the market has made a stand before. I am not sure when, but it will require great earnings releases, days without more Ebola patients being discovered, and flights not getting delayed out of fears that an entire family may have the virus.

From the beginning of time, mankind has coexisted with war, disease, and famine. There is also fear in America, and in some respects, it seems oddly misplaced. From 1918 to 1922, Typhus and the Spanish Flu killed 53 million people around the world. Each year, TB, Cholera, Malaria, and AIDS kill millions as well. What is surprising is that last week, a new $40 million amusement park opened in a Damascus suburb, while militants control the suburbs on the other side of Syria’s capital. Then, over the weekend, I saw a photo of a shopping mall in Turkey that was 45 minutes from Kobane. One would think it would be millions of miles from the siege, as massacres serve as an exclamation point from ISIS.

Our government debt, student loan debt, and pension fund liabilities are ticking time bombs that need to be addressed. However, the only focuses in the news are about the terrorists and the Ebola scare. It is understandable to be concerned, however not to the point where it affects our day-to-day lives and makes the economy worrisome.

As investors, and as financial advisors, we have to keep our eye on the "ball" (our financial plan, YOUR financial plan that we are entrusted with) and that "ball" is five years, or more, in the future. Don't let day to day swings cause you to lose your focus. We at Newton Financial Network certainly are not going to lose ours.

 

 


 

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Regards, W. Edward Newton Jr., CPA, CFP (R)

Certified Public Accountant

 

 

 

 

W. Edward Newton Jr., CPA, CFP (R) | Certified Public Accountant

13850 Ballantyne Corporate Place, Suite 500 Charlotte, North Carolina 28277 Phone: (704) 552-8689 | Email: ednewton@ednewtoncpa.com