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It seems that whenever an extended period of growth passes in the stock market, everyone begins calling for a correction. What is a correction? It seems to imply that a rise in share prices always becomes incorrect at some point where fixing is needed. This type of thinking relates well with how most people think about investing . . . as being more like gambling. We’ve had a good run at the roulette wheel or craps table so the inevitable turn of fortune must be right around the corner. It’s easy to slip into this kind of thinking, especially if you spend a lot of time watching the investment focused news, unless we remind ourselves that we are actually investing in companies, not betting on the daily rise and fall of their stock prices. An investment is ownership in a company (stocks) or lending to a company or government (bonds). We make these investments because we believe the company is sound, makes a good product, has a bright future. Sure, the price of ownership shares may rise and fall with the news, but we’re investing in it because we believe that 3, 5, 10 years down the line the company shares will be worth more than what we purchased them for – on an inflation adjusted basis, I might add. And, hopefully, we’ve collected some dividends and interest along the way as well.
LPL 2018 Outlook
Is a “correction” out there? Yes, of course, if you mean by correction that we will have periods of share price declines and economic slowing. But it may be more important for reaching your investment goals to remember that every one of these past periods has represented a buying opportunity as well! There is no guarantee, of course, that the investment markets will continue to rise but they do have an extremely consistent record historically. The attached 2018 Outlook produced by LPL Financial provides some of the fundamental reasons for continuing to stay invested. As you look through it and consider your personal situation, please don’t hesitate to contact us with any questions or concerns you might have regarding your portfolio.

LPL 2018 Outlook

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https://www.cascadefs.com/2018-investment-and-economic-outlook/
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