Winds of Change Have Begun to Blow
As I sit here over Memorial Day weekend on the shores of Lake Ontario watching the boats leave and enter the marina, these words of motivational writer William Arthur Ward come to mind, “The pessimist complains about the wind; the optimist expects it to change; the realist adjusts the sails.”
Winds of change define a force that has the power to change things, and we all know change is constant. Changes in the stock market began in the latter half of 2021 and has continued during this current year. This is the result of markets wrestling with widening inflation and rising interest rates — something that hasn’t happened in years and has often led to “investor complacency.”
What we’re witnessing in the markets is a readjustment. It’s not unusual, but it is uncomfortable. When this happens, markets re-trench, valuations create a lower base and markets can eventually go up from there. This market dynamic should be navigated in productive ways that can differ depending on where you are in your investment life cycle.
For young investors with time to recover, a market contraction is just another storm to be weathered. Buying at current discounted prices can often work in their favor over the long run.
However, if you are already in retirement, or are about to enter into it, what you do now could translate into a reduction in lifestyle for years to come.
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