When you’re thinking about long-term retirement planning services, you have to consider as many potential scenarios as possible. The financial experts from Enhanced Benefits Solutions counsel people in the St. Peters, MO, area on everything from choosing the right life insurance to protecting their assets against unnecessary risk.
One of the biggest concerns among people planning for retirement in the wake of the economic downturn of 2008 is the fear that the stock market could plummet again, but you might feel some sense of relief reading this guide to the basics of stock market ups and downs from Enhanced Benefits Solutions:
- Isn’t investing in the stock market just like gambling? While there is an element of uncertainty in any type of investment (including buying a house), the stock market has a proven track record and is an important part of well-rounded retirement planning. When people compare well-balanced portfolios to gambling in Vegas, they’re just stoking the fear fire. In general, the stock market averages a 6% to 7% increase over the long run, even though there are periods of sharp decline.
- What if the stock market crashes again? Won’t I lose everything? Again, the answer is no. When the stock market drops, you’re not actually losing your investment. Your investment’s worth has dropped, but you still own the investment. If you sell when the market is low, that’s when you’ve officially lost money, so it’s better to just hold what you have through the market’s highs and lows.
- Why would anyone keep investments that aren’t doing well? It might sound like a counterintuitive financial strategy to hold on to stocks that are falling, but there’s a good reason to do that. Following the crash of 2008, many people panicked and sold their homes and their investments, and they lost a lot of money. It’s the nature of the stock market to decrease and then increase, and the patient investor wins the race. The stock market is now higher than it was before 2008, so people who held onto their investments are doing better than they were before.
Retirement planning doesn’t have to be scary, and with Enhanced Benefits Solutions in your corner, you can look forward to a bright and stable future! Visit them online, or give them a call at (636) 928-8586.