What to do in case the stock market seesaws

In 2016, the market spikes that recurred throughout the year had some investors, especially the novices, feeling butterflies in their stomach. It also caused some short-sighted investors to gamble on the market fluctuations to try and catch a quick score. Financial planners in the Sacramento area issued a warning that stock investment is not for the faint of heart. 

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Market seesaws are not uncommon. Therefore, crafting a game plan or abiding by a set of rules in such cases is needed to ensure profits are maximized in the long run. Here are some advices on what to do: ·

Take daily Dow and S&P 500 reports with a grain of salt. 

Every trading day, there is an unpredictability in the gyration of the numbers in these stock market indices. It can increase or decrease by several hundreds, but then net change after a month or two could be just 100. Predicting how the stock market would behave is a waste of time, and at times a perilous task. There needs to be a long-term outlook; experienced investors have a 10- to 20-year horizon. ·

Listen to experts. Unfortunately, rampant nowadays are doomsayers and clickbait media outlets who “predict” the collapse of the stock market or an oncoming recession when there is market fluctuation. It is better to consult with investment or financial advisors to better understand the state of the market. 

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Springer Financial Advisors has been able to help clients formulate an effective financial plan toward achieving their financial and life goals despite ever-changing economic factors. The company uses a comprehensive and integrated approach that results to well-informed decisions. Follow this Google+ page for more discussions about financial planning.

What are the indicators of a bull market

Since 2009, the stock market has been bullish, and for numerous financial experts, there is no end in sight for the trend. 

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This is good news for many investors and the market. A bullish stock market means more trading movement and plenty of opportunities for profit. A strong market also boosts employment rate and disposable income for the larger economy. 

However, the beginning of the bull market is not always apparent to the regular stock investor. One needs to have a keen eye and ability to analyze trends in order to know if there is bull market in the horizon. Some of the signs to look for are the following: 

Index of Leading Economic Indicators (LEI) 

One of the most accurate ways of determining whether the stock market is on the rise or receding is to check the LEI. The index is a combination of many factors, including stock prices, real M2 (measure of money supply), index of consumer expectations and many more. Increasing or above average LEI, especially after hitting the bottom, is an indicator of a bull market. 

General pessimism on stock market 

The first phase of a bull market is marked by pessimism from investors and the media. During these times, stock prices decrease to a point where the cost outweighs investment risk. It results in investors beginning to buy stocks again and sustaining earnings. 

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Springer Financial Advisors uses a holistic approach in financial planning that allows its team of advisors to meet their clients’ financial and life goals. Learn more about financial management by checking out this website.