The Experts: The No. 1 Thing Investors Shouldn’t Be Worried About–But Are

June 5, 2013

Excerpt by Michelle Perry Higgins

Start Shopping for Long-Term-Care Insurance at 45The Correction Is Coming. Relax.

The next big correction! Let me officially go on the record by predicting that another major market adjustment is just around the corner. It could happen a month from now or be three years away. No one can say when with absolute certainty. The stock market has a good track record of completing its cycles and I encourage investors to recognize that and stop worrying about the inevitable pullbacks. Instead of wasting energy with apprehension and fear, I would advise prudent investors to plan and educate themselves.

I employ a two-step planning process:

1. Have a well-diversified portfolio with a strong defensive barrier (cash and fixed income) to carry you through the down years.

2. Educate yourself on the historical cycles of the stock market. “History doesn’t repeat itself, but it does rhyme.”— Mark Twain

See related graphic: “S&P Historical Composite: 1871-Present Inflation-Adjusted Secular Highs and Lows.

Read the rest of the article here