Preparing for Turbulence;the best response to market fluctuations is to keep your emotions at bay

Sept. 14, 2011 - PRLog -- While investors cannot predict future market instability, they can prepare, says local Edward Jones financial advisor.

"It's natural to feel nervous when your investments look like they're losing altitude, but it's important to stay the course," said Maureen L Ross, an Edward Jones financial advisor in Stuart. "The best response to market fluctuations is to keep your emotions and your investment strategy steady."

Stock market declines are a normal part of investing. According to recent research, the Dow Jones Industrial Average has dipped by five percent on average 3.4 times a year. Bigger drops occur less frequently, with corrections (10 percent or more) once a year, and bear markets (20 percent or more) every 3.5 years. Volatility happens regularly and is no reason to sell a quality investment.


Ross offers some perspective on how to keep white knuckles at bay in turbulent times:
Turbulence is normal. Stock market declines are a normal part of investing. According to recent research, the Dow Jones Industrial Average has dipped by five percent on average 3.4 times a year. Bigger drops occur less frequently, with corrections (10 percent or more) once a year, and bear markets (20 percent or more) every 3.5 years. Volatility happens regularly and is no reason to sell a quality investment.

Fasten your seatbelt, not your parachute. Bailing out at 30,000 feet isn't the best reaction to turbulence. Similarly, some investors might react by jumping in and out of the market, which can significantly impact investment performance. Historically, the best days often follow the worst days. While no one can predict what will happen in the future, getting out of the markets after the drops may mean missing any potential recoveries.

Your destination determines how you travel. If you're traveling from the east coast to the west coast, turbulence shouldn't cause you to land in the Midwest and walk the rest of the way. With investing, switching to the relative stability of a short-term investment can place your long-term goals at risk. Volatility in the markets should not change your goal of retiring at a specific age or providing for your child's education.

Take the long view.  Some passengers react to turbulence better than others. Some ignore it, and others simply sleep through it. Successful long-term investors take the same approach to volatility, focusing on their long-term plans instead of day-to-day fluctuations.

"A solid financial strategy is key to riding out these short-term ups and downs," says Ross. "You can make small adjustments along the way, but unless you experience a significant life change, it's essential not to veer off course."

For more information about Edward Jones, please contact Maureen L Ross, Edward Jones in Stuart, located at 6060 Se Federal Highway, (772) 219-1732.

About Edward Jones
Edward Jones provides financial services for individual investors in the United States and, through its affiliate, in Canada. Every aspect of the firm's business, from the types of investment options offered to the location of branch offices, is designed to cater to individual investors in the communities in which they live and work. The firm's 12,000-plus financial advisors work directly with nearly 7 million clients to understand their personal goals -- from college savings to retirement -- and create long-term investment solutions that emphasize a well-balanced portfolio and a buy-and-hold strategy. Edward Jones embraces the importance of building long-term, face-to-face relationships with clients, helping them to understand and make sense of the investment options available today.

Edward Jones, which ranked No. 11 on FORTUNE magazine's "100 Best Companies to Work For 2011," is headquartered in St. Louis. The Edward Jones Web site is located at www.edwardjones.com, and its recruiting Web site is www.careers.edwardjones.com. Member SIPC.