Michael Carminucci’s Advice on Managing a Down Market

Two words that no one wants to hear on the TV or radio are “stocks plunge.” Since today’s media has a way of hyping market activity, it is wise to remember not to panic over just one day’s events. Risk and return go hand in hand, and investing in stocks can generate excellent long-term returns.

As Michael Carminucci — financial consultant, LPL registered principal, enrolled agent and founder of Carminucci Workplace Solutions — explains in his book “Putting the OK in Your 401k”, including some uncertainty in your portfolio is not optional; you would not meet the requisite long term growth objectives without higher risk/higher return stocks. This is an unavoidable aspect of 401ks, IRAs, and other retirement accounts. You prepare yourself for the reality that stock prices rise and fall, and, while you can offset that volatility with the proper investing behavior, it is a reality you have to come to grips with.

A sound economy will regularly experience periods of reasonable decline. This is called contraction, and it needs to happen in order to, among other reasons, keep the value of currency under control. If you hold your investment steady and continue to add to your profile portfolio even during times of contraction, in the long run, your savings will grow to the extent you need.

What makes investing so difficult is the many variables to consider. Choosing stocks and bonds requires answering numerous questions to garner the necessary information. You must identify your objective, set a timetable for your procurements, and recognize your preferences.

Once you have carefully created your stock portfolio, it is nearly always the correct decision not to withdraw early, despite what may be happening in the markets in the short term. Don't give into media hype about impending market trends. Over the course of decades, you will reap the benefits of not giving in to low risk tolerance.

Collaborating with a Financial Advisor for both short- and long-term goals can help you take sensible precautions, such as incorporating diversification to reduce your risk and balance loss. 

If you would like to start working with a dynamic, personable team of local financial professionals, please call Carminucci Workplace Solutions today at (914) 617-8780, email mike@carminucciagency.com or visit www.carminucciworkplacesolutions.com for a FREE financial analysis of all your current holdings.

Securities and advisory services offered through LPL Financial, a registered investment advisor. Member FINRA/SIPC.