When markets fall, it’s easy to forget that downtrends are part of the investing cycle. So when prices slip, it's a good time to review some common terms that you may be hearing that describe today’s financial markets.
The first is “pullback,” the mildest form of a drop in the markets. You might hear a market commentator refer to a dip of 5% to 10% after a peak as a pullback.
The next term is “correction,” which is used when markets drop 10% to 20% after a peak. Then there is a “bear market,” where the drop is 20% or more since the last peak.
When prices are trending lower, it’s easy to second-guess yourself. But over the years, we have found that doesn’t help.
We’ve aligned your investment strategy with your goals, time horizon, and risk tolerance. We built your portfolio anticipating that there will be good times and bad.
If you find yourself thinking “this time, it’s different,” please reach out as soon as possible. It’s important that you feel comfortable with our approach and we are always happy to talk.
The Cycle of Investing
January 27, 2022