WrapManager's Wealth Management Blog
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Concerned about Market Volatility? Time to Reassess Your Risk Tolerance

Posted by Michael J. O'Connor | CWS®, Vice President Investments

January 20, 2016

The stock market has gotten off to one its worst starts ever for a year—on last Friday alone, the S&P 500 and the Dow Jones were both down over 2%,1 and for the year the Dow has already declined over 1,400 points. Both indices are down some 8% for the year,2 and it’s still just January! Fears over China’s slowdown, cratering oil prices, and iffy corporate profits have many investors worried about what lies ahead.

In fact, a recent survey conducted by the American College showed that over 60% of retirement income specialist’s clients were concerned about the recent market volatility and their retirement security.2 Does January’s market volatility have you concerned too?

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Downside Strategies Portfolio Strategy

Getting Through the Next Stock Market Correction

October 14, 2014
Getting through stock market corrections begins before they happen. While it is almost impossible to predict exactly when a market correction will begin and end, there are things you can do now to help reduce the stress felt by many investors during these events. Remember that corrections are temporary and a normal part of healthy markets. You can get through any stock market correction if you have the right frame of mind, adhere to a few basic guidelines and use your financial advisor as a sounding board. Avoid Hasty Investment Decisions It’s normal to feel anxious during corrections and think about changing direction with your investments. But timing the market rarely, if ever, works. By the time you’ve made a decision to change investments, it’s possible the correction could be half over. Once you’re out of the market, the next decision is when to get back in, which is also timing the market. [+] Read More

3 Steps to Take During a Stock Market Correction

August 8, 2014
For all the talk there’s been over the last two-plus years of a looming stock market correction, one has yet to take hold. The S&P 500 had a banner year in 2013, is up this year +4.15% through August 1,1 and has been in a fairly steady climb since 2012. For two years, the market has resisted a correction in the 10% - 20% range.2 In July, however, the S&P 500 posted its first monthly loss since January, and on July 31 saw its biggest point drop since April.3 It’s possible this weakness marks the beginning of a stock market correction, though no expert can know with certainty. What we do know, however, is that corrections are a normal part of bull markets, and there are steps you can take when one occurs. What to Do During a Stock Market Correction Corrections are generally defined as relatively short-lived pullbacks in the market in the 10% - 20% range, something we haven’t seen since the summer of 2012. As you can see below, over the last 34 years the market experiences average intra-year declines of -14.4%. Past Stock Market Corrections and Declines (Click chart for larger version) Source: Standard & Poor’s, FactSet, J.P. Morgan Asset Management. Returns are based on price index only and do not include dividends. Intra-year drops refers to the largest market drops from a peak to a trough during the year. For illustrative purposes only. *Returns shown are calendar year returns from 1980 to 2013 excluding 2014 which is year-to-date. Guide to the Markets – U.S. Data are as of 6/30/14. [+] Read More