Some well-respected economists are predicting we are on the verge of another recession. The Dow Jones Industrial Average is down 5% from its high. Historically, the Dow dips about 5% three times during the year. The markets also see a 10% drop once a year, and a 20% drop once every three years. These fluctuations are normal occurrences.
These market pundits, known for their doom and gloom predictions, are calling for a 100% chance the market will go down; however, they neglect to say when. So yes, these pundits may eventually be right, just as a broken clock is right twice a day. It is very likely we will see a 20% market correction again. However, we do not believe we are on the verge of it at this time.
While the Great Recession of 2008-2009 was the worst period we’ve seen since the Great Depression, the current economy is adding jobs. The economy is not growing at a breakneck pace, but gross domestic product is still growing; therefore, we believe the economy is getting better.
Our stance has not changed regarding the investment of your assets in good times and bad. At Henssler Financial, our investment philosophy remains intact. Long-term investors with investment horizons of 10 years or more should stay invested in the stock market through high quality stocks. We believe our philosophy of buying high quality stocks is a time-tested and proven way to preserve long-term investment capital, and offers appreciation potential. Our disciplined approach stresses the reduction of bankruptcy risk, which in our opinion, is the paramount risk when investing in the stock market. So, stay the course. If you do not need the money for the next 10 years, it should remain in common stocks. Do not stop investing; it is expensive, as you may miss out on market upswings. Worse, you could miss meeting your financial goals.
At Henssler Financial we believe you should Live Ready, which includes understanding how your investment philosophy works long term. If you have questions regarding the Henssler Ten Year Rule, the experts at Henssler Financial will be glad to help. You may call us at 770-429-9166 or email at experts@henssler.com.
Disclosures
This article is meant to provide valuable background information on particular investments, NOT a recommendation to buy. The investments referenced within this article may currently be traded by Henssler Financial. All material presented is compiled from sources believed to be reliable and current, but accuracy cannot be guaranteed. The contents are intended for general information purposes only. Information provided should not be the sole basis in making any decisions and is not intended to replace the advice of a qualified professional, such as a tax consultant, insurance adviser or attorney. Although this material is designed to provide accurate and authoritative information with respect to the subject matter, it may not apply in all situations. Readers are urged to consult with their adviser concerning specific situations and questions. This is not to be construed as an offer to buy or sell any financial instruments. It is not our intention to state, indicate or imply in any manner that current or past results are indicative of future profitability or expectations. As with all investments, there are associated inherent risks. Please obtain and review all financial material carefully before investing. Henssler is not licensed to offer or sell insurance products, and this overview is not to be construed as an offer to purchase any insurance products.
