Stay invested during the course of market ups and downs © 2014 wheresjenny.com Stay invested during...

Stay invested during the course of market ups and downs

© 2014 wheresjenny.com




Markets have always been difficult to predict, even for experts. However, historical data strongly indicate that the longer an investor stays invested in the market, the higher the probability that the investment will yield good real (above inflation) returns. As the aphorism goes, “it is time in the market, not timing the market, that matters”. Hence, regardless of whether an investor uses the index or managed mutual funds to invest in the market, it is important that he stays invested (and if investing using systematic plans, continue to invest) during the course of the ups and downs of the market.



Vocabulary

Inflation : A general increase in prices and fall in the purchasing value of money.

Aphorism : A pithy observation which contains a general truth.

Bonds : An agreement with legal force, in particular

Outdistance : Leave (a competitor or pursuer) far behind.

Compelling : Evoking interest, attention, or admiration in a powerfully irresistible way.



Before taking action, remember why you invested in stocks in the first place

The everyday ups and downs of the market show us the risks of investing. But what about the risks of not investing?

Those who do not invest are taking a lifestyle risk, the risk that they will not be able to keep up with rising prices for everyday goods and services. Though perhaps not as obvious today, this lifestyle risk is probably the most harmful risk to one’s financial well-being over time



Stocks have led the way

Throughout history, stocks have been the best investment to outdistance rising costs. U.S. government bonds and U.S. Treasury bills offer investors a government guarantee as to timely payment of interest and guaranteed return of principal if held to maturity, but, unlike stocks, guaranteed investments generally do not offer opportunities for growth of capital and income. While past performance is no guarantee of future results, stock investing historically has been the best choice for investors who have recognized the importance of balancing both investing and lifestyle risks.



Staying the course

Following are six time-tested strategies that have served investors well. These strategies can help smooth out the impact of market fluctuations over time and potentially enhance overall performance results.

Invest for the long term Invest systematicallyDo not time the marketDiversifyUse professional investment managementTalk with your investment professional



(analyze, commission, commodities, dividend, enterprise, fluctuate, gazette, invest, investigate, leverage, market, performance, portfolio, profit, regulate, rival, tabloid)

1) The primary job of the Securities and Exchange Commission is to ---------- companies to ensure no illegal acts occur to hurt investors.

2) An institutional investor would pay a ---------- to a brokerage firm that brings in a thoroughly researched idea.

3) Investors find that the daily stock sheets priced in a ---------- are much easier to read than prices in a broadsheet newspaper.

4) Companies realize the importance of paying shareholders a ---------- and also complying with any new tax law.

5) Professional investment managers attempt to deliver positive ---------- on the investment funds that have been entrusted to them

Fill in the blanks with the correct word from the brackets




6) Some investment traders hope that the stocks they pick will ---------- so that they can buy and sell many of them over a short period.

7) Since the stock Bill had purchased had not yet created a substantial ---------- , a price above what he had paid, he refused to sell it.

8) One of the jobs of a researcher is to ---------- charts and choose a company with a great chance of success.

9) Soybeans and pork bellies are examples of agricultural ---------- and are key factors that can determine profitability of food companies.

10) It is important for clients to learn how to ---------- with one focus toward return and the another towards considering risk




11) Does John believe that the Kankakee ---------- , a well-known business newspaper, has superiot financial pages?

12) The New York Stock Exchange is a large and efficient stock ---------- for the largest companies in the world.

13) Bonds, mutual funds, gold stocks and real estate comprise the ---------- Gail owns and gives her the diversification she needs and wants.

14) The Chicago Board of Trade has a difficult job to ---------- investment activity because the investment vehicles are so volatile.

15) Grant, Eileen and Bob have established a small ---------- that has been profitable almost from its inception.

Stay invested during the course of market ups and downs © 2014 wheresjenny.com Stay invested during...

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Transcript of Stay invested during the course of market ups and downs © 2014 wheresjenny.com Stay invested during...