The first thing you’ll look for when you open your quarterly statements is whether your investments are up or down. If you find a significant change in the value of your investments, it’s going to mess with your head.
No matter what your quarterly statement says, it is not an indicator of whether you will be able to achieve your investment goals. But, a down quarter, like this one, may cause you to second-guess your investment decisions and consider making changes based on fear.
Never change your long-term game plan based on 90 days’ worth of performance. You’ll start chasing returns or timing the market, which can reduce your returns by more than 7%, according to studies by Bloomberg and Davis Advisors.
An annual assessment could be the best way to manage your emotions in an unpredictable stock market and give you the information you need to make sure your investments are on track. Even then, any changes you might make will need to be based on more information than you will get from your statements. Use these tips to maintain your confidence in your portfolio:
Never change your long-term investment goals based on a 90-day snapshot of your mutual funds’ performance. Evaluate your funds’ performance annually with an investment professional to keep your portfolio on track.
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