Tuesday, August 25, 2015

Market Meltdown, Bloodbath and Armageddon Headlines

Jim Parker, from Dimensional, has put together a special one-off edition of the Coffee Break brings together some useful perspectives on current market volatility. 

Coffee Break: Avoiding Meltdown

It’s one of those rare times when financial news moves from the business pages to the front page. “Market meltdown” makes for a great headline. But for individual long-term investors the biggest danger is an emotional meltdown. [Click on headings or use links below.]
Deep economic and market analysis are not really what most investors need at times like this. Instead, the most useful attributes are discipline, diversification, patience and self-knowledge. Veteran journalist Jason Zweig, who’s seen it all before, lists five things you shouldn’t do now.

Market volatility can be hard to take, but the more attention you pay to day-to-day fluctuations the more your emotions take over. If you need the money tomorrow, you might have cause to worry. But for most of us, there will be many more market cycles to come. So don’t watch.

With our exposure to China, Australia has been caught up in the market falls. Dipping into and out of the market may seem tempting at this time, but listen to another veteran financial journalist Michael Pascoe. People who panic only risk making it worse for themselves.