by Jesse Anderson, CFA
Recent market volatility and declines have left many investors feeling anxious. Hopefully, after weeks of debate, Congress has set us on a path toward improved fiscal discipline. That action will not erase many years of irresponsible spending, and as a result, Standard & Poors lowered our country’s credit rating over the weekend.
Many of you may be asking: What does all this mean and how will it affect our investment strategy? We continue to stay strong in our investment philosophy. Generally speaking, this is very similar to the distractions we encounter on a regular basis. In just the past few years we’ve dealt with a housing bubble, financial crisis, and numerous European downgrades and bailouts.
All these issues are what make the stock market unpredictable, which is one of the primary reasons for creating and continually refining the Snider Investment Method. In times like these, discipline becomes critical. We must remove the emotions from our investment decisions. (Click here to read an article that discusses current investor psychology and its effects on the markets.)
We’ve built a strategy to make the most of these situations. With our cash reserves and dollar cost averaging, we strive to smooth out the bumpy ride of the short-term movements in the market. We understand that it can become frustrating to sit through the volatility and nerve-racking headlines. However, we continue to believe that the Snider Method can keep meeting its long-term objectives, and we feel it still gives us the best risk/reward balance for long-term investing even under the current market conditions.
(Also, here is a good article that discusses the current market conditions compared to our last market meltdown.)