Headlines after the stock market's fall on Friday certainly woke up many investors from the calm of the summer and had many asking: What do I do now?
Fortunately, history and research both continue to give us the answer. As long as investors have a well-developed plan, they should stick to it and do nothing.
For starters, on Monday, the S&P 500 jumped 1.5%, making up for more than half of Friday's losses, though it is down more than 1% on Tuesday.
Second, remember that investors tend to chase headlines to their detriment.
It is hard to not get caught up in the emotion of the market, but try to remember the old saying that, "investors create 50-year floods every few years."
As I wrote about in a piece encouraging investors to "Keep Calm and Carry On" after the Brexit vote in June, research has shown that investors consistently under-perform the market by selling low and buying high.
In keeping with our political season, as an adviser to President John F. Kennedy is rumored to have told him when he thought he was saying the same things over and over again: "When you are at the point that you think you are going to get sick if you say it one more time, you have finally reached the point when many people hear it for the first time."
So, how do investors produce better returns in this market? Click here to find out in a piece I wrote in April, and remember, stay anchored on the long-term plan, not the headlines, models or products of others.
This article is commentary by Preston McSwain as an independent contributor and doesn't reflect the views of Fiduciary Wealth Partners.