The US economy is feeling the effects of the Biden Administration's sanctions on Russia. The stock market has had immediate effects.
The benchmark stock indexes have fallen, with the S&P 500 down 2% in the last five days.
The stock market swings are not something to be worried about. Real-world events can make stock prices more volatile in the short-term, but in the long run they have less impact on your investments.
The stock market is doing well. The S&P 500 has had an average annual return of 10.39%. This is a much higher rate of return than bonds, which have historical returns of 5 to 6 over the same period of time.
The stock market crash of 2020 had the largest one-day loss in history, but the market quickly recovered.
"Unfortunately, we have more experience with issues like the Iraq War and the annexation of the peninsula of Crimea," says Michael Wagner, co- founder of the investment firm.
While no one knows how the stock market will play out, the longer you plan to invest, the less you should worry about short-term events.
Thirty years from now, are you going to review your portfolio and think about how we did in February?
Even if your borrowings are small and your positions aren't immediately threatened, upsetting events can lead to irrational decisions. An uncertain mind will not make good decisions.
It is important to remember that the value of your portfolio is a number on paper, not money that is in your pocket right now.
It is not official or real until you hit the sell button. It goes back to the point of perspective.
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