If you’ve been following financial news, you’ve heard news of the S&P 500 dropping on a soft jobs report at the beginning of the week. Media outlets always looking for a spin to get more readership have said things like the market is “tanking” and we’re spiraling into a recession.
Now beyond the fact that “tanking” means it dropping 3%…which is hardly “tanking”. And the fact that the US has technically been in a recession already for at least a year under the old definition. My point is this: timelines are important. In investing, we are concerned with long timelines. And sometimes that demands that we stay the course when guys like this are screaming red hot nonsense and things are blowing up around us. This applies to real estate investment just as it does to stocks or any other investment. I’m using stocks as an example since that’s the market currently going “nuts”.
There was lots of turmoil this week on the stock market. The volatility index was as high as it’s been since the pandemic and the 2008 housing crash. I’m not sure why, because the market is behaving exactly like the Fed wants it to behave when it raised interest rates.
And more importantly, on a broader timeline, nothing bad is happening. The S&P is down 3% this week, but up 9% on the year. It has hit record highs this year. On average, the stock market appreciates by 10% each year. And even when the market experiences bear cycles or times where prices fall, the overall trend is historically positive.
Unless you are day trading or swing trading, this news should mean very little to you except possibly that your next regular investment into markets may be acquired at a discount. Our timeline is one of months, years, and decades. Of which, this event in the market will be just a blip.
Stay the course my friends!