Like many things, one of the most powerful emotions that affect our financial decision-making and that of the stock market is fear.
We saw it last year when the news of the Coronavirus lockdowns hit the markets, causing some stocks to tumble more than 30% in a matter of days.
Although the market has somewhat recovered depending on who you ask, fears of another downtrend are expected by many investors worldwide.
Deutsche Bank recently conducted a poll that included 550 global investors, which revealed that 58% of the participants are expecting a stock market drop before the end of the year of at least 5% to 10%.
The catalyst promoting the “unease” is, of course, the coronavirus. The second reason being higher-than-expected inflation.
1 in 10 of the participants expect a sharper than 10% decline in the market.
For those entering or already in and drawing off retirement, a 10% decline from their retirement account value could mean months, possibly even years of support lost.
“If there’s a big loss in the market and you’re taking withdrawals, you could be taking more from your portfolio than what it can make up for,” commented certified financial planner Avani Ramnani, managing director at Francis Financial in New York.
“If that happens early in retirement … the recovery may be very weak and put you in danger of not recovering at all or being lower than where you would have been and therefore jeopardizing your retirement lifestyle,” Ramnani told CNBC.
Another poll conducted by Gallup shows that 68% of adults say the coronavirus situation is worsening.
In June, 89% of adults believed the pandemic situation was actually improving.
This shows how quickly minds can change.
When emotions across the board shift so quickly, they also cause market volatility to rise along with it, meaning the “right” piece of bad news could spark an instant market tumble.
Historically, when facing comparable times of pandemics, political and economic uncertainty, gold has acted as the safe haven for strategic individuals to shield their savings from the unknown.
Inflation rates have been climbing for nearly a year straight, our government’s reckless planning risked an economic shutdown, and our national Social Security fund is estimated to be depleted by 2033…
Do you believe that things are headed in the right direction?
Call American Hartford Gold today at 800-462-0071 and let us know your thoughts.