How Do You Treat a Bipolar Stock Market?

Very carefully.

The US stock market has been up almost every day since February 11. But are we happy?

Not really. Most of us are still hurting from the ups and down we experienced earlier in the year.

Take the week of January 25th. Please.

On Monday, the Dow Jones Industrial Average was down 208 points. On Tuesday, it was up 282 points. On Wednesday, it was down 223. On Thursday, it was up 125. It was also up on Friday — 397points — but, at that point, we were too frazzled to care.

Will the bipolar stock market return? Definitely. Do we know when? Afraid not. And what’s why we have to be doubly careful.

First, be careful about the negativity bias.

You’d like to be objective when looking at your finances, but our human nature doesn’t make it easy. While we do like good market returns, we totally hate and despise bad market returns. Don’t let your natural negativity bias force you to make the wrong move in bad times and miss the good times to come.

Second, be careful to avoid miracle cures.

If there’s one group that loves volatile stock markets, it’s annuity salespeople. They will tell you about a “guaranteed return.” They won’t tell you what you are giving up in terms of liquidity, and the high fees you are paying for a return that may seem very puny in the years ahead.

Still looking for relief?

My prescription is a visit to an hourly planner — someone who doesn’t sell any financial products, and can be 100% objective about you, your goals and your investments.

Our bi-polar markets will continue to move up and down, but with the right plan, and the right planner, you’ll feel confident that you’ve got the cure.

I look forward to hearing from you.