Shortly after the Gulf War began in January of 1991, the stock market dropped 4.3%. Six months later, the market was back up 18.7%. That's why, Joe Scarborough with Edward Jones Investments says it's important to "not panic." "I would say the first thing a person needs to understand is not to let fear motivate their investments and at a time we're all going through right now, that tends to happen."
You may be asking questions like how much will the market drop or when will it recover and should I pull my money out? The first two questions can't be answered but if you're investing for the long term, you probably don't need to pull your investments off the market. Scarborough says, "This is just another time the bare market has driven down the market and it will come back up."
If you're looking to make a quick buck in the short term, you may want to re-prioritize. But for long term investors, Scarborough advises against any quick moves. "During adverse times, fear tends to paralyze people where they don't react or if they do, they make wrong decisions."
Instead, you may want to look over your portfolio. Scarborough says, "I think they need to have a good recovery plan and that recovery plan is to make sure they are in good quality investments that are well balanced and diversified."
If you don't currently, invest your money in stocks, bonds or mutual funds now, don't shy away during these uncertain times. Scarborough says, "I've heard it said the best time to invest is when you have the money available to invest. Interest rates are at an all time low. Our inflation rate is low so things are looking real good right now."
While the economy may not seem strong to consumers, Scarborough remembers a time when things were much worse. "Over time the economy has been much worse. Back in the 70's we had gas lines and people waited for hours. You couldn't even buy gas unless your license plate number was an even or odd number on certain days."
Edward Jones Investments offers several free seminars throughout the year to educate consumers. The latest one was entitled "War, Terrorism and Your Investments." For information on future seminars contact Joe Scarborough at (806) 792-4811 or ( click here ). For NewsChannel 11, I'm Sharon Maines.