U.S. stocks ended a defensive week in the red as investor sentiment deteriorated in the face of fresh worries out of China. For the week, the S&P 500 fell 5.77%, the Dow lost 5.82%, and the NASDAQ slid 6.78%.[i]
When markets take a dive, it’s natural to worry about what’s happening and where markets will go next. However, part of being a stock investor is taking market swings in stride. Now is the time to stay cool-headed and focused on your long-term goals. On that note, here are 4 things that you definitely should not do after last week’s market pullback:
Don’t listen to the talking heads. The selloff is happening in the middle of a seven-year bull market. As of Friday, the S&P 500 has gone 1,418 calendar days without a 10%+ drop (between 10/3/11 and 8/21/15).[ii] Regardless of what the media is saying, the S&P 500 is down just 7.51% since its peak in mid-May.[iii] Markets experienced a similar selloff in September and October of last year. However, the talking heads have taken this widely anticipated pullback and made it sound like 2008 all over again. Remember – the media’s goals are not aligned with yours. They want to keep viewers glued to their televisions and newspapers, waiting for the sky to fall. Out in the real world, we’re taking a look at the numbers behind the selloff and making prudent adjustments where we feel it’s necessary.
Don’t panic and hit the eject button. Corrections are a normal part of market cycles. Since 1927, the S&P 500 has experienced pullbacks of 5% or more about every 3.5 months.[iv] While the past can’t predict the future, research shows that panicking and exiting the market is often the worst thing you can do when markets swing. Investors are notoriously terrible at picking market tops and bottoms; since periods of high growth often occur during turbulent times, investors who sell off and sit on the sidelines frequently miss out on the good days.
For example, an investor who stayed fully invested in the S&P 500 between 1995 and 2014 would have experienced a 9.8% annualized return. However, if they had traded in and out of the market, missing just the 10 best days of the market, their return would have plummeted to just 6.1%. Six of the 10 best days of the S&P 500 fell within two weeks of the 10 worst days.[v]
Don’t think like a day trader instead of an investor. Stock markets are driven by fear and greed. Right now, traders are in full-on fear mode and are selling off indiscriminately at any hint of bad news. Long-term investors are taking a look around and seeing what opportunities the pullback is offering.
Don’t get complacent. Pullbacks offer you the chance to ask yourself if you’re honestly prepared for a correction. If you have a prudent strategy and a well-diversified portfolio, then you’re better prepared for a potential correction. We don’t know whether the current selloff is a short-term blip that will reverse in a few days or the beginning of a deeper slide. However, domestic indicators are trending positively, and we believe that there is room for a resurgence.
We are keeping a very close eye on markets worldwide and will update you as needed during the evolving situation. While we can’t predict where markets will go in the next days and weeks, we focus on in helping clients manage their wealth in many market environments.
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The kids are back in school and now there is a routine to the day!! However, sometimes chaos is the order of the day.
The days are getting cooler and shorter, yet in spite of all of this positive energy, why are you as a “Working Mom or Dad” struggling with PARENTING GUILT?
For every family that is discussing children or has children, there comes a time when an important discussion will be had. Will one of you be a “stay at home parent” or will you use childcare in whatever form that might be.
Maybe you went back to work to make ends meet, or to stay on your career track. It really does not matter when you get asked the question………….
“Why do we have to go to ____________ (fill in your answer) everyday? Why CAN’T you stay home with us?
The guilt machine kicks into gear and all of the emotions take over. You drop everything you are doing to be the better parent ignoring what your mind is telling you about what you have as a priority and then the conflicts kick in.
If you are like 100% of the parents in our working world, then the guilt builds until you lash out at your spouse or the children, for giving you Parenting Guilt.
Meanwhile, you've got tons of emails to catch up for your business and you still have not finished that report for your job -- you know, the one that pays the bills.
I've been that person -- with enough on my plate that one day, after a long day at the office, I had a precious two hours before I had to put my daughters to bed. Instead of spending the time with them, I was on my computer -- working.
I kept thinking that once I got ONE more thing off my list, I'd have more time to spend with my daughters
I am sure you know the answer to this idea
So something had to change and I made the decision that I would be PRESENT.
The question I would ask myself is, “Am I ready to be no place else” and if I could not answer yes, then something would have to change.
I realize that my life is not yours; however I have two recommendations about being a better parent and neither of them cost any money.
First, Designate Family Time
Put down your phone, turn off your computer – the world will not end and whatever stupid thing Donald Trump says in that time will still be there later or the next day. (Much like the stinky slightly oozing diaper that you should have changed 30 minutes ago)
Spend thirty minutes with the children – read, go for a walk, swing them in the swing – just be present and connected. They will love it and that leads to tip number 2
Engage, Engage, Engage
Pick 2 things you can do each day with your child(ren) and do them every day and they don’t have to be major time events. When my girls were in the single digits of age, I realized that 3 to 5 days a week, I could take them to school. Fifteen minutes of drive time together, that included spelling words and singing to our favorite songs. (For the Record, we all know the words to Alan Jackson’s Chasin’ that Neon Rainbow and we will sing loud)
My favorite thing that I miss even today, is reading to “The Girls” at night. It takes maybe 10 minutes and gives you a lifetime of memories. Even today, we have lines from Noisy Nora that bring smiles and responses from all of us.
When you get those two things done, magically you will feel any guilt disappear. Then children will be better and I can say that your marriage will be stronger.
Enjoy your last summer weekend and let me know what your 2 things are!
- Tannery & Company Wealth ManagementWealth Mangement, 2001 - presentWith a professional expertise spanning more than three decades, Michael A. Tannery, Co-Founder and CEO, brings in-depth understanding and successful practice in financial services and wealth management. Michael co-founded Tannery & Company Wealth Management with the mission to help people make informed financial decisions and unbiased investment choices leading to discovering their True Wealth. Michael Tannery is a registered principal offering securities and advisory services through independent financial group LLC (IFG), a registered broker dealer and investment advisor. Member FINRA/SPIC License to sell securities in the following states:TX, OK, WI, MI, VA, FL Third party information provided is from sources believed reliable however we cannot guarantee or represent that it is accurate or complete. Because situations vary, any information provided on the site is not intended to indicate suitability for any particular investor. Hyperlinks are provided as a courtesy. When you link to a third-party website you are leaving our site and assume total responsibility for your use at these sites.
- Wachovia SecuritiesSr. Vice President – Financial Advisor, 1998 - 2001
- Merrill LynchVice President - Financial Advisor, 1992 - 1998
- Travis Wolff & CoShareholder, 1991 - 1992
- Pannell Kerr ForsterPartner, 1989 - 1991
- Tannery & CompanyVice President, 1981 - 1989
Michael Tannery’s passion for his work comes from “seeing people achieve what they never dared hope to accomplish” through sound wealth management strategies. He is known for his intense loyalty to his clients. His burning desire is to create a legacy and a path of opportunity for those that follow.
In 2001, he co-founded Tannery & Company Wealth Management with his wife Tina, and serves as CEO. Prior to that, he held senior positions at Prudential Securities and Merrill Lynch. Michael spent the early part of his career as a partner in Pannell Kerr Forster, a national CPA firm.
A graduate and athlete at SMU, he loves to follow Mustang sports. He remains passionate about fitness, and enjoys bicycle racing like his annual pilgrimage to the Hotter ‘N Hell 100-mile race in Wichita Falls. Michael is a graduate of Leadership Richardson and is active at First Methodist Church of Richardson.
- Southern Methodist UniversityBBA, 1976 - 1981
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