That Was Quick

I am surprised that the market faded so quickly after the open. CNBC blamed it on chatter out of Iran. Adam Warner has some good insight on why that may not be the case.

It is periods like this where it is easy to get caught up in the short term action and trade too much. Despite all the volatility the market has not moved very much. Occasionally changes need to be made in a portfolio but I know from reader comments over the life of this blog that many people become convinced of an outcome and turn their portfolio upside down in belief of that outcome, and then end up being wrong.

For most investors this is unnecessary. Looking at the big picture, good companies tend to go up in price over time. This is not to suggest blind devotion to anything but to give some perspective. And clearly good companies can go down in price.

In mulling these things over for yourself I think you need to keep your time horizon and your abilities in mind. Longer term retirement money does not have to be correct about the next 5% in the S&P 500.