Market downturns: Threat or opportunity?
By If you’re like me, you’re probably being bombarded with all of the doom and gloom surrounding the recent market downturn. It’s tempting to think that the sky is falling and wait until better days to invest in your retirement accounts.
It’s important to remember that, as a younger investor, market downturns can present investing opportunities. During these times, you may be able to buy quality stocks at cheaper prices.
Just zoom out and look at recent history. Over the past year, the S&P 500 is up over 9%. Over the past five years, it’s up over 145%. Over the past 20 years? A greater than 500% rise in the index.
This recent drop is likely just a blip in the context of the long-term growth trend of the stock market. I can’t guarantee that, of course, but over the last 25 years, we’ve seen a pandemic, a housing crisis, and 9/11 all do major “damage” to the markets, and they’ve always historically recovered to surpass previous record highs. It’s important to keep that in perspective as we hear about tariffs and political tension domestically and globally.
I’m not suggesting you “time the market” to take advantage of equities being on sale. It may continue to slide for a bit. But history has generally been kind to those who have stayed the course and funded their retirement accounts early in their careers, no matter how it’s performing. Time is the most powerful tool you have at your disposal when it comes to investing.
If this sounds daunting to you, it might help to work with an experienced financial advisor. As a team, we’re always looking for growth stocks with strong potential over the long term. The companies we focus on are those that have steady management teams that have demonstrated the ability to deliver consistent results — companies that offer products that Americans will likely continue to use long after these volatile times. We can help you block out the short-term noise and make fundamentally solid investment choices.
If that sounds like you, reach out to our team today. We can take a look at where you stand in your investments and make suggestions on how best to move forward.
This material is provided for informational purposes only and should not be construed as investment advice or an offer or solicitation to buy or sell securities. It’s important to note that market performance can fluctuate due to various factors, including economic conditions, geopolitical events, and investor sentiment. While historical data provides insight into long-term trends, past performance does not guarantee future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.
Article by Ryan Petrunyak, Wealth Advisor at Family Financial Partners — a financial services firm in Lexington, Kentucky.