Buy Low, Sell High!

One of the most time-honored pieces of financial market advice is to “buy low and sell high.”  This means that we want to buy into investments at low prices, and then sell them at higher prices so that we can realize a profit.  Makes simple sense, right?  Yet, human nature tells us to panic when the stock market takes a dive.  Our inner voice screams, “Get out! Get out!”, and this is where many investors can make big mistakes!  So today, I challenge you to pause, reflect, and take a deep breath, before making any moves when the stock market is downward facing.

Downward Facing Dog Pose (Adho Mukha Svanasana)

Have you ever watched your dog perform a good morning stretch as he or she gets up for the day?  This is where Downward Facing Dog Pose gets its widely recognized name from.  We should all take lessons from our four-legged, furry friends if we want to start out our day feeling our best!  Downward Facing Dog is a standing pose and slight inversion (like an upside-down V) that allows us to build strength, while getting an overall body stretch.  It can energize us, and rejuvenate us all at the same time, and lucky for us, it’s usually repeated many times in just one yoga class.  Check out my video to see the How To’s!  Onward and downward my friends!

What Goes Up Must Come Down!

If you were invested in the stock market in 2017, you were likely quite happy with the way things were chugging along.   Markets soared as a result of economic growth and corporate profits, and volatility was at an all time low.  But as the saying goes, “All good things must come to an end”, or at least to a “pause”.  That’s exactly what happened in 2018, which was not nearly as friendly to our equity portfolios.  Volatility returned and the broader stock markets were down overall.  Phone calls started to pour in as clients began to panic, and what do you think I told them to do?  That’s right: NOTHING!  Seems like an easy out, right?  Was I being lazy or inattentive to my clients’ needs?  Not watching their returns close enough?  Absolutely not!  Because….

What Comes Down Must Go Up!

As my client, you will hear me say this often: As long as you are invested appropriately, according to your time horizon and your risk tolerance, the best thing to do is stay put!  One of the most important things that financial planners can do for our clients is act as a behavioral coach, so today, I offer you three timely tips for when your investment balances seem to be moving in the wrong direction.

Chill Out, Dog!

1. Time in the Market vs. Timing the Market: Research shows that we CANNOT time the market. Even financial planners, economists, and analysts who study the data and trends, do not hold crystal balls.  Simply being invested correctly (based on your own  financial goals), over a number of years, is much more likely to give you the types of returns you expect to see.  Buying and selling based on fear and what you think “may” happen tomorrow is likely to cost you!

2. Dollar Cost Averaging: Investing the same dollar amount into the same investment on a systematic schedule allows you to buy in when the market is low AND when the market is high. Research shows that you are likely to end up buying at an overall lower price.  You do this when you contribute to your 401(k) every paycheck, or to your IRA on a monthly basis.  In other words, don’t stop contributing when the market goes down.

3. Cash is Not King: When the market seems to be on a downward slide, is when many people think it’s a good idea to move to cash. Sit there for a while and wait for the storms to pass.  But, what if you also miss the sunny skies after the storm?  Again, you can’t time the market!  I’m a firm believer that the majority of your cash belongs in your bank account as emergency savings, not in your investment accounts.  Why?  Being “invested” in cash will cost you!  Inflation is the rising cost of goods, and why you hear your parents tell you that hamburgers used to cost 25 cents.  If you are not earning at least 2-3% from your investments on average, and inflation rises about that annually, well then, you are losing money!  It’s that simple.

So, the next time you see your pup in Downward Facing Dog Pose, or you assume this position on your mat during your next class, smile to yourself, and know that the next movement is likely to be upward!  And then remember that this also holds true for the stock market!

How to Hold Downward Facing Dog

Place your hands about shoulder-width apart and your feet hip-width apart, all on the mat, in an upside-down V position.  Straighten your arms and draw your shoulder blades down your back.  Distribute your weight into your torso, up through the tailbone, and into the floor through your legs.  Keep your ribs in a neutral position, and draw your abdomen in, while engaging the muscles in the pelvic floor.  Eventually, your legs will straighten, and your hamstrings, calves and ankles will stretch.  Practice deep breathing.

Benefits of Downward Facing Dog

It is said that with regular practice, Downward Facing Dog Pose (Adho Mukha Svanasana) can:

• Strengthen the arms, hands, shoulders and legs
• Increase full body circulation
• Relieve stress and tension headaches

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. We suggest that you discuss your specific situation with your financial advisor prior to investing. All performance referenced is historical and is no guarantee of future results. Investing in stock includes numerous specific risks including: the fluctuation of dividend, loss of principal and potential illiquidity of the investment in a falling market. Dollar cost averaging involves continuous investment in securities regardless of fluctuation in price levels of such securities. An investor should consider their ability to continue purchasing through fluctuating price levels. Such a plan does not assure a profit and does not protect against loss in declining markets. All investing involves risk including loss of principal. No strategy assures success or protects against loss.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. We suggest that you discuss your specific situation with your financial advisor prior to investing. All performance referenced is historical and is no guarantee of future results.

Investing in stock includes numerous specific risks including: the fluctuation of dividend, loss of principal and potential illiquidity of the investment in a falling market.

Dollar cost averaging involves continuous investment in securities regardless of fluctuation in price levels of such securities. An investor should consider their ability to continue purchasing through fluctuating price levels. Such a plan does not assure a profit and does not protect against loss in declining markets.

All investing involves risk including loss of principal. No strategy assures success or protects against loss.