Since the beginning of the year the Dow Jones Industrial Average is down about 6%, the S&P 500 is down about 5.5%, and the NASDAQ Composite is down about 8%. What does this mean to you? Should you panic? Should you move your money?
Well, unless you’re getting ready to retire in the next couple of months the answer to all of these questions is probably nothing. It’s hard sometimes but the truth is we really shouldn’t worry about the short term. As retirement investors we need to remember to be patient and focus on the long term. A good retirement investor understands that is not about what our investments are worth today, it’s about what our investments will be worth 10, 20, 30, or 40 years from now when we get to retirement. No one knows exactly what the market is going to do in the short term. But what we do know is that over any extended period of time the market gradually goes up.
If you have money invested in stocks you’re going to have some down years. But over the long term you’re going to have many more positive years than you will have negative. It all boils down to having patience. Just like you have to have patience on the road while driving, you have to have patience on the road to retirement.