What if I panic whenever the market falls?

Question

At the moment, I have been investing long enough to know that market declines make me uncomfortable, but I also have long term goals that require growth. At the moment, my accounts include retirement savings and money that may be needed much sooner. Right now, the decision could affect roughly $45,000 in my situation, so I want to compare the tradeoffs instead of using a rule of thumb.

Soradin · Accepted Answer

A portfolio that repeatedly causes panic may be too aggressive or may need clearer expectations and a larger cash reserve. When the options are compared, risk tolerance is the ability and willingness to accept investment losses while staying committed to a plan. When the options are compared, it should be considered together with time horizon, income needs, reserves, goals, and the financial consequences of a decline.

What if I panic whenever the market falls?

Soradin

Need help with your situation?