The start to 2016 has been marked by uncertainty in a number of areas. China, ISIS, Oil, etc. Not surprisingly, this uncertainty has caused plenty of fear and, consequently, volatility in global stock markets. Also not surprising are the familiar echoes from the “talking heads” on television and even some investors to “Get out!” or do something. Of course, there is no one-size-fits-all approach to investing or risk management.
If I were to make a generalization about the people who have bright financial futures ahead of them: they are prodigious savers and investors. For the most part, they have set up their wealth accumulation plan to be automatic, via either large 401(k) contributions, large contributions into other investment accounts, or, in many cases, both.
Would you worry if the stock market closed for five months? It did just that at the outbreak of World War I. I’ll admit, that is over 100 years ago. But what if the market was only open a few days a month? I would guess that after a time, most people would actually worry less than they do now. To see why that is so, let’s talk about what a market is, and what it does for us.