So far in 2016, the markets have been dropping like crazy and many investors are scared of the stock market. I’ve been watching the news and they have done a good job at adding to the fear. They showed still images of traders on the floor that had despair written all over their faces. There was a graphic in big bold red numbers and an arrow pointing down that showed how much the average 401k plan lost each day. They even used music that you typically hear in a horror movie!
They say this is the worst 10-day start to the stock market in history. I checked my portfolio balances on Personal Capital and saw that the stock market volatility so far has cost us over $20,000! But I’m not worried.
I know that many people – regardless of age – are scared to invest in the stock market. For the younger generation, their fear is rooted in the fact that just as they started to save and invest, the Great Recession blew up and they lost most of their savings when the markets tanked in 2008.
For the older generation, they are scared of the stock market because of the frequent crashes we’ve been experiencing in the past 20 years. But I am here to put all of this into perspective so that you can overcome your fear of the markets. [Read more…]