First and foremost, we, at InvesTrust, want to convey our great sadness – and our hopes and prayers – to the people of Japan who have been affected by the earthquake and tsunami. The horror and tragedy are almost beyond comprehension.
But, as the recovery in Japan begins and the true scope of the devastation is seen, the questions for the rest of the world begin. Not the least of which relate to investing. Undoubtedly, there is still significant uncertainty about what the future holds and the path to recovery. But, what we should keep in mind is to not panic.
Yes, there will be some bumpiness to the stock markets for a while. This morning, for instance, the Dow is off over 200 points. This is surely a negative over-reaction to what happened today on the Tokyo stock exchange – down over 10%. The US market is dealing with fear and uncertainty both driven by emotion.
What should you do? Remain calm. Don’t do anything rash. If you are thinking about moving to cash to protect yourself, it is likely too late. It is a good idea to stick to your long term asset allocation. When the market does begin to move back up, you will be ready for it.
Remember, we have seen some pretty big downturns in the market in the past, and look how far we have come from those dark days.
Please let us know if you have any questions.
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