Submission by Dr. Glenn Mollette
You never undo your seatbelt or jump from a moving roller coaster. Nor should you when it comes to the current stock market.
Eight years ago, if you bought a share of VOO or Vanguard S&P 500 ETF stock, you may have paid about $220 for the share. Today, as of this writing, it’s worth $490.55. In other words, even with the recent fall of the stock market, you have made good money on your investment. A couple of weeks ago, it was up to $560, meaning you were flying high on your profit. Still, you’ve done well.
If you bought your share of VOO two weeks ago at $560, then you’ve lost $70—at least for now. You may lose some more, but you have to hold tight. Don’t panic and sell now, or you will lock in a loss. Ride it out, and give the market time to settle down and rise again. If you have to cash in your stock, then do so while the prices are high.
Don’t invest your grocery money in stocks. This is the money you need every week for food, shelter, travel, and overhead. It should not be money you spend on stocks. If you do, then in two weeks you might have to sell your stock to cover expenses, risking a loss. Only invest money in stocks that you don’t currently need for general living expenses.
Who knows how the market will perform over the next few weeks? It will likely be a few weeks or months before the tariffs truly shape up. Reports indicate that numerous countries are coming to the table, interested in making deals and playing fair with the United States. This will benefit both us and them. As these deals stabilize, look for the stock market to become more stable once again. If Japan, India, South Korea, Canada, and Mexico level the playing field with the United States, our stock market will stabilize. If more reports show manufacturing returning to the U.S., the stock market will begin to rise again.
Now may be a good time to buy, but keep in mind the market may go down some more. If you bought VIG two weeks ago, you’ve already seen a significant drop. Remember, you only lose money if you sell when the stock is down. I feel confident the stock market will come back bigger and bolder than ever, but it may take a few months or longer.
The stock market has averaged about 10% growth over the last fifty years. This means there have been years when it made more and years when it made less. An average of 10% is about the best you can expect for your money over the long haul.
Now is not the time to panic or jump from the roller coaster. Rely on your stable income, such as Social Security, or any other steady income you may have. If you have a regular-paying job, you may want to stay with it a little longer if you can and if you enjoy your work.
