I hope you’re having a great holiday season so far, and trying to save a little more than you’re spending. (I know it’s hard.)
It’s been a few months since I sent out my last note, and I want to discuss a few topics related to the markets and your portfolio.
We’re a few weeks into some real volatility, which is a fancy word for the roller coaster that the market has been on recently. I’m going to share some of my views around this, and give you some ideas about what you can do.
Here’s the reality
Eighty percent of Americans live paycheck to paycheck, and 40% can’t come up with $400 in an emergency. These statistics are crazy and scary.
You don’t need to be a statistic. There are things you can do to beat the odds.
So what should you be doing?
Auto-Stash, Auto-Stash, Auto-Stash—I can’t say it enough.
Auto-Stash allows you to automate your investments on a consistent basis, and build wealth over time.
That means some weeks you’ll be buying shares when they’re high, other weeks when they’re low, and over time, the highs and the lows should balance themselves out. Like now, for instance, you’ll be buying while the market has been down. But it could be up tomorrow, nobody knows, and we don’t have a crystal ball. (I wish I did, though!)
Here’s why Auto-Stash can be a great tool. By putting small amounts of money into your investments on a regular basis, you can feel good about ignoring market volatility and focus on investing for the long term. Even $5 a week can make a difference.
So, why are the markets going down right now?
There isn’t one reason, there are a few:
- Fear over rising interest rates, and whether the Federal Reserve will continue raising short-term rates over the coming year.
- Escalating trade tensions, including tariffs with China, are causing some emotional angst.
- Something called the yield curve.
So what should you do with all this information?
Ignore the noise
TV news personalities and talking heads can make investing really confusing (that’s their job), but it’s actually very simple. You should continue investing through all the ups and downs. Don’t focus on today’s news, or even next week’s. When it comes to most of the news about the market, I believe it’s a lot of short-term noise.
Overall the U.S. economy is doing fine, and I’m very optimistic about the future. For sure, it’s been a really hard month for the markets. But I’ve seen this before over my 20-year career in finance. This is why we set Stash up to focus on your long-term financial goals.
If you’re trying to “trade” through this, good luck to you. We don’t, and will never recommend timing the market.
Here’s why: Markets don’t just go up, they can also go down. The current market has been pretty extreme, so the down days have been big, and the up days also have been big. The type of market we’re in now can actually be a good thing for your long-term portfolio if you’re using Auto-Stash. You want to consider actively participating in the markets, even when they’re volatile, at all the prices, high and low.
History doesn’t always repeat itself but if you look at the market between 2000 and 2017, it has increased an average of 6.26% annually. And we all know there have been some good and bad years over this time.
Last, but not least
I want to say that you’re awesome! Three years ago, Ed and I started Stash to help you get off the sidelines and start taking control of your financial future. Today, three million of you have Stash accounts and we couldn’t be more proud.
Don’t be afraid of this volatility, embrace it. Just keep following our time-tested strategy. If you don’t have it on already, go ahead and turn on Auto-Stash, you’ll find it in the home feed of the Stash app.
When in doubt, follow The Stash Way.
We look forward to many great years ahead as we help you meet your financial goals.
Thanks—and keep on Stashing!
CEO – Stash