High inflation, increasing interest rates and economic uncertainty are causing havoc in the stock market, with the S&P closing down nearly 20% last year. Market fluctuations continue in 2023. This is a good time to be working with an investment adviser who can provide the perspective and strategies to help you weather the storm. The MDA endorses DBS Investment Advisers, LLC (DBSIA), which offers members savings on investment fees. The following insights are offered by Ted Schumann, managing partner of DBSIA.
• Market volatility is not a reason to panic or sell all your positions. Day traders may have good reason to panic, but most dentists are long-term investors, not traders.
• When interest rates move higher, it can be especially bad for high-growth stocks. Increasing interest rates prompt growth stock investors (tech stocks tend to be growth stocks) to re-evaluate what they are willing to pay for the stocks based on discounted earnings. The higher rates go, the less valuable tech stocks look.
• A volatile market is an opportunity to add to strategies that do well with inflation and rising interest rates, such as commodities, small cap stocks, and consumer staples.
• A down market is an opportunity for those with cash in the bank to earn interest and for investors to lock in a higher bond yield.
• Investors in the accumulation phase — those working and making regular deposits — should not be disturbed by current market conditions. They are in a great position to take advantage of temporary market weakness and buy investments at lower costs.
• Investors in the distribution phase, like retirees, should take withdrawals from cash positions of their portfolio to avoid selling in a turbulent market.
Connect with DBSIA to discuss your current investment allocation,
or how current market conditions are affecting your portfolio.
Email ted.schumann@dbsia.net or call 800-327-2377.
DBSIA has a paid endorsement with the MDA.
MDA is not a client of DBSIA and has financial incentive to promote their services.