Jul 15, 201309:59 AMThe Bottom Line
with contributors from Associated Bank
The unintended consequences of quantitative easing
(page 2 of 2)
So what should an investor do in this environment? The best answer is to carefully review your investment objectives and make sure they align with your investment portfolio. And dig in. If your investment objective is to “beat the S&P 500,” challenge yourself and ask why this is so important. Perhaps it is more important to have a portfolio that performs more steadily with less volatility than the market as a whole; or perhaps there is a lifetime goal such as a part-time position that enables you to volunteer with a favorite charity. That goal may be very attainable with far less risk than a goal of simply beating an arbitrary stock market index, so think about it.
Recently, a Facebook shareholder was quoted as saying to Mark Zuckerberg that Facebook’s stock has been a “disaster.” Really? A move from its initial price of $35 to $24 — that’s a disaster? Not all stocks go up all the time. If that move, in what should be one stock from a well-diversified portfolio, qualifies as a “disaster,” perhaps that investor should visit Moore, Okla.
After a reality check, any portfolio adjustments should be given time. The U.S. economy has proved its mettle time and again. Widely forecasted disasters rarely seem to come to fruition. For example, just five years ago headlines about global energy shortages were plentiful. Today, we’re talking about U.S. energy independence. A carefully constructed, well-balanced investment portfolio is the best way to participate in the amazing resilience of the U.S. economy. It is also the best way to help you attain your true long-term financial goals.
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