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Maybe not time to panic, but good time to reassess
If you have any money in a savings account, you know the interest you earn is in the low single digits.
The stock market is an attractive alternative — earning an annual interest rate of 11.69 percent from 1973 to 2016, but higher returns are always accompanied by higher risks.
After hitting a record 26,828 on Oct. 3, the Dow Jones Industrial Average dropped nearly 832 points Wednesday to prove the point about risk.
Market watchers blamed the 10-year Treasury note, which hit 3.25 percent for the first time since May 2011, higher interest rates bogging down the sale of houses and cars. That and worries about U.S. trade with China were blamed for sparking the sell-off.
There’s no shortage of advice when it comes to the stock market.
“Be fearful when others are greedy, and greedy when others are fearful,” said Warren Buffett. His Berkshire Hathaway A stock dropped nearly $16,000 a share on Wednesday.
Other proverbs include “Never try to catch a falling knife,” “a fool may earn money but it takes a wise man to keep it,” and “bulls make money, bears make money, pigs get slaughtered.”
Selling stocks now locks in your losses; perhaps it’s time to buy at bargain prices? Perhaps the best axiom is “don’t just do something, sit there.”
Only time will tell which bit of wisdom will provide the best advice for the current market condition. Like medical care, periodic financial checkups are always better than a trip to the emergency room.