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Needless Investing Worries

The top things that make investors fret, but shouldn’t.

by Jean Chatzky

savvymoneyUnless you’re an adrenaline junkie, investing and following the stock market can be nerve wracking. The market goes up, and checking your portfolio is fun; the market goes down, and you’d probably rather see the dentist than your financial adviser.

Worrying about the balance in your accounts is reasonable; these are, after all, the vehicles funding your retirement. However, there are some things in the world of investing that are just not worth losing sleep over. The Wall Street Journal recently surveyed some financial experts, and here’s what they say you shouldn’t make you worry:

  • The government. Sure, politics can bother you for other reasons, but when it comes to the market, it’s best not to over-think what Congressional action (or non-action) might mean for the market on a day-to-day basis. According to the vice president of the American Association of Individual Investors, most of the problems the government is dealing with now will not “significantly impact” the direction of the market over the next few years.
  • Market fluctuations. “I think most investors are more worried about volatility than they should be,” Larry Zimpleman, president of the Principal Financial Group, told the Journal. To Zimpleman’s point: the financial crisis dinged or damaged everyone’s portfolios, yet four years later we’re seeing the market hit new heights. “If you know you won’t need to draw on the assets for at least the next five years, volatility is not something that should keep you up at night,” he said.
  • “The inevitable pullbacks.” The market has been doing well recently, but according to financial planner Michelle Perry Higgins, a correction (a drop that occurs in the midst of a bull market) is coming; we just can’t predict when. “The stock market has a good track record of completing its cycles and I encourage investors to recognize that and stop worrying,” she said. Instead of worrying, Higgins recommends having a diversified portfolio to absorb the shock of any market turns.