Stick to the Plan
Former heavyweight boxing champion Mike Tyson once said, “Everyone has a plan until they get punched in the face.” While we do not usually look to professional boxers for their wisdom, the words ring true in many contexts including the financial markets.
The 3rd quarter of 2015 ended up as one of the most difficult in recent years for asset markets of every type and every region. It is the first time in almost four years that the US equity market experienced a 10% or greater correction. Several areas of the market experienced an even more significant drawdown. At times, markets seemed disorderly. There were days when the market would plunge several percent only to reverse, and vice versa. Trading in securities was halted several times as limits were hit and, at times prices were unable to be quoted.
It is during challenging market conditions when it is most important for investors to remember their long-term objectives and the investment plans established to help them achieve their goals. Dislocations in markets create opportunities, and it is important to take a long-term perspective to evaluate appropriate actions that will enhance instead of hinder progress toward their goals. There are many more rounds to go, and financial goals will be met only through solid fundamental work and discipline.