Idaho Falls, Idaho (KIFI) – With a potential trade war and drop in the stock market, many people’s first instinct is to pull out of their investments.
Christian Moon, a financial advisor with Snake River Investment Counsel says the best thing to do is wait it out.
Moon said that he doesn’t think anything that has happened in the last couple of weeks or the last few months should change any retirees or investors long term plans.
But that can be easier said than done. Moon says that while younger clients probably don’t care too much right now, it’s retirees that are trying to spend that money that worry about stocks dropping.
“If we focus on longer term periods of time, everything’s going to be fine. We just have to effectively wait it out,” Moon said.
So what can investors do during low points in the stock market? Moon said it’s important not to make emotional decisions when buying and selling stocks. Low points in the stock market can also be a good opportunity to re-evaluate your own portfolio.
“I think one of my favorite Warren Buffett quotes is something to the effect of you should be fearful when others are greedy and you should be greedy when others are fearful… A lot of times in these big market swings, it’s an overreaction,” Moon said.
Moon said that it would be rational to assume it’s a bit overblown or that people have oversold their stocks, and this could be a great buying opportunity.
It’s also important to diversify what you invest in.
Moon said that while U.S. stocks are down, bonds are up. So someone with a broad basket of U.S. stocks, international stocks and bonds will feel less of an impact when the stock market drops.
