Despite the recent market highs, it’s been a difficult few weeks for Delaware County investors. While the economy is showing some signs of improvement, recent turmoil in the stock market, thanks in large part to comments from Federal Reserve Chairman Ben Bernanke, shows how fragile our recovering economy still is. If we factor in the possibility of another European bailout—this time in Italy —we begin to see several factors that put consumers on the wrong side of another economic roller coaster ride.
Since economic conditions half a world away can impact the savings strategies of those here in Delaware County, it’s important to recognize where you are at in your savings plan and allocate assets accordingly.
Sticking it out: Younger savers, those between the ages of 18 and 35, still can benefit from weathering the storm in stocks. The overall trajectory of growth in the marketplace is still positive and they should continue to invest for the long term.
Staying engaged: Instead of buying and holding assets, those in the middle—around 35 to 50 years old —may want to take a more engaged approach. Since this age group doesn’t want to see a big loss at this stage of the game, a highly diversified portfolio may be a good fit. Many are tempted to try and time the market, but this is a difficult game even for the most seasoned financial professionals.
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