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A Look at Market Psychology

As risk of the coronavirus (COVID-19) outbreak escalates, Brittain Group Financial Services wants to communicate our commitment to our business continuity measures while at the same time, ensuring the health and safety of our clients and employees. This worldwide outbreak has injected a sense of uncertainty into the markets. If you’re invested in the stock market you may have found yourself sitting on the edge of your seat over the last few weeks as we watch market volatility increase. We are here for you and we want to take a moment to update you on our thoughts related to the coronavirus, its impact on the financial markets, and, ultimately, on your personal financial situation.

Market Psychology

It is important to take a step back during volatile times and keep an open mindset. By accepting short term volatility, you can stay focused on long-term investment goals and take advantage of lower prices.

All assets rise and fall in value and the more extreme the swing, the stronger the sentiment. Overcoming this market psychology is no easy feat but learning how the market works can help to reduce stress and increase your ability to “stay the course."

Corrections are a normal part of the stock market. They can be good opportunities to invest in equities as valuations become more attractive, which will give you the potential to generate above-average returns when the market rebounds.

If you remain invested, you will likely benefit from the long-term uptrend in stock markets. If you try to time the market, and stop and start your investments, you run the risk of hurting future returns by missing the best recovery days in the market.

Your investments are designed to support your long-term objectives, not today’s needs. In situations like this, it is important to have perspective and remember that swift market drops are not unusual. Of course, the headlines are scary and fear of the unknown is scariest of all, but the nature of the market is that it will go up and down. That is just par for the course.

When you think about it, our emotions share a similar reaction between excitement and depression. Surges of pleasure with favorable uptrends and neurotic negatives with declines. Unfortunately, emotions can be drivers for selling early thus diminishing significant gains that can occur over the long-term.

We believe the best response is to acknowledge what you’re feeling, reach out to us if that would be helpful, and have confidence that we are on top of the situation. And always keep in mind that in the short term, market movements can be heavily influenced by headlines and computerized trading, but in the long term, markets tend to reflect broader-based economic trends. One of our most important roles as your trusted advisors is to not let the difficulties of the short term prevent the reaping of potential benefits of sound, long-term investing.

What We’re Doing

What we do know for a fact is that the market will continue to do three things: It will sometimes go up, it will sometimes go down, and sometimes it will barely budge. The other absolute certainty? Your financial well-being is our number one objective.

Our team is burning the midnight oil to monitor the situation as it unfolds and recommending actions as appropriate.

And we will leave you with one final piece of good news: sometimes, situations like this can actually create opportunities. For example, as prices drop, we will also seek out any opportunities to “rebalance” and shift your asset allocation if it aligns with your long-term goals.

If you have any questions about your specific situation, please contact us. We are here to help and we are here for you. Thank you for your continued trust and confidence.

This content is developed from sources believed to be providing accurate information, and provided by Twenty over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.