Five Things Investors Should Know About the Current Economy

Unstable.

If there is one word to describe our current economy, that’s it.

One day Bloomberg reports significant drops in U.S. stock futures resulting from the Euro crisis, and the next day Wall Street boasts a five-year high.

“We have been having a tough economic time for a while now, and we don’t know how long it will last,” explains Samantha Fraelich, Certified Financial Planner and Vice-President of Bernard R. Wolfe & Associates, Inc.

“Yet it is still important to make investing a high priority to enjoy strong long-term benefits.”

Fraelich believes there are five things every investor should know.

“Don’t wait,” she says. “Trying to time the markets is impossible. For long-term success, it’s time in the markets, not timing the markets.”

Secondly, she recommends diversifying.

“You don’t want every strategy in your portfolio to be moving in the same direction at the same time. You know you’re truly diversified if portions of your portfolio are behaving differently from each other over similar periods of time,” explains Fraelich.

She also advises investors to consider re-balancing.

“Now may be an ideal time to re-balance your portfolio. This is especially helpful if many of your investments were made a while ago and may not account for current market trends.”

And, turn off the TV. Fraelich insists, “If you believed all of the negative news over the past four years about Europe … you would probably be hiding cash in your house instead of investing … There is no direct relationship between the economy and how the stock market moves in today’s environment.”

“We all get emotional about our own money,” admits Fraelich.

She encourages seeking the help of a professional to remain disciplined.

Bonus PINK Link: Do Your Investments Match Your Values?

How has the economy effected your investment decisions?

By L. Nicole Williams

“If you want to see what God thinks of money, just look at all the people He gave it to.” Dorothy Parker