A Volatile Market: How Investors Should React

Joe and “Big Al” Clopine explain why the market correction could actually be a good thing for investors. Learn strategies for dealing with a volatile market and why you shouldn’t let emotion cloud your investment strategies.

2:42 “Our market is volatile. But here’s the thing: volatility is expected; we’ve had sort of a quiet market the past several years. Volatility is what you expect from the stock market, and the truth is, with stocks versus cash or bonds, you expect a higher rate of return over the long term but the cost for that is the volatility”

4:07 “When it comes to our local economy, [China] doesn’t have a huge effect on us, but it does have an effect because it’s a global economy and if our stock market goes down then that affects companies”

8:19 “Even the worst of the worst we got through it; there’s always going to be crises and something going on, but you have to understand how markets work and you have to have discipline and strength”

8:50 “No one ever succeeded at anything by doing nothing; if you want to retire successfully you need to take control of your money, and the time to do it is right now”

12:20 “You can’t lose sight of the fact that the stock market is a market like any other; it’s a place where people gather to buy and sell. Like any other market, sometimes sellers have to offer discounts to sell more products, or in this case, to unload their stocks”

14:31 “This is why individual investors fail most often when it comes to investing; because of the volatility in the markets, they don’t appreciate the volatility—they get fearful of it”

15:05 “The risk premium simply means you earn more by investing in stocks, but they’re more volatile”

21:21 “Most people get interested in stocks when everyone else is; the time to get interested is when no one else is…following the herd is dangerous”

26:00 “Realize that by owning stocks, you’re getting a higher rate of return and you have to expect periods of volatility and periods of decline. If you can’t stomach it, then you’re going to have to come up with an alternative plan, but it’s probably going to change your lifestyle”

34:53 “A Roth IRA is where you don’t get a tax deduction but everything grows tax-free; if you’re single your income has to be below $116,000 to do a full Roth IRA”

37:11 “Offset investment gains with losses”

37:56 “Capital losses net against capital gains dollar for dollar…if you end up with more losses than gains, great! They carry forward to next year, and you go through the same computation next year. At times when the market is down you want to look at tax loss harvesting opportunities”