A bit too much excitement

What a ride. The S&P 500 Index fell 19% from late February through early April. Since then, the index has gained 12%, but not without a few sharp dips along the way.

A year’s worth of excitement in four months. At such times, we cannot fault people for beginning to doubt their plans and consider major changes to their investment approach. In the face of such pressure to act, we counsel caution for at least two reasons:

1) With stocks gyrating like a belly dancer, you will have trouble predicting the next move. Better to stay in one place than to zig when zagging was the answer.

2) We rarely make our best decisions while holding our breath. Step back a bit and wait for your pulse to slow before making any major moves.

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