Investment

What to ask yourself before making any investment moves as the market falls – CNBC

Published

5 years ago

March 12, 2020

Thanagon Karaket / EyeEm | EyeEm | Getty Images

As the stock market sinks, you’ve probably already heard not to check your 401(k).

Yet when it comes to steering your personal financial plan in a turbulent time, it’s still wise to take a proactive approach, according to Michael Liersch, a behavioral finance expert and global head of wealth planning and advice at JPMorgan Chase.

Generally, people tend to take one of two strategies to uncertain markets, Liersch said. Either they decide on action no matter what or stick to a do-nothing approach.

Those extreme approaches tend to happen when individual investors get too caught up in the short-term news, and forget their long-term time horizon.

“What I always coach investors, clients, advisors to do is really to empathize with themselves,” Liersch said. “If we didn’t feel anxious, that would be unusual.”

Start by acknowledging that emotion, telling yourself it’s OK feel this way, Liersch said. Next, and importantly, remind yourself of your individual goals and objectives.

That includes revisiting what you’re trying to achieve, how much you need to have in your investments for your goals and the time horizon over which you plan to stay invested.

For example, if you’re 50 and planning to retire in 15 years at age 65, you want to invest more, not less, in order to successfully get to where you want to be.

“Those kinds of anchor points help people understand whether those short-term feelings and what they’re seeing in the news really translates into actions and decisions they should make in their portfolio,” Liersch said.

Here’s what to ask yourself before you make any immediate investment moves.

Assess your capacity for risk

Once you’ve identified your goal — the reason why you’re investing the money — ask yourself how much risk you need to take on to successfully reach it.

Let whether or not you need to take risk be your guiding principle, Liersch suggested.

“If you need to take risk, really the answer is to potentially re-evaluate your portfolio or re-establish if the strategy you’re in is working for you,” Liersch said. “It’s not necessarily to no longer take risk.”

Look at your cash flow needs

If you have short-term cash flow needs, you may need money from your investments now.

But if your time horizon is longer, then you have a higher capacity to take chances.

“Looking at that balance between the need to take risk and the capacity to do so can help investors understand whether those market dynamics are really relevant to them or not,” Liersch said.

Do an emotional gut check

Lastly, assess how the market swings change your personal tolerance for risk.

While it is important to empathize with yourself and recognize the emotions you feel amid market turbulence, that shouldn’t be your first priority, Liersch said.

Instead, let your goals drive your investment decision making.

“I would just encourage investors to always be engaged,” Liersch said. “Instead of making the markets the starting point for the evaluation, go back to the objective or the goal as the starting point.”

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Investment

Tesla shares soar more than 14% as Trump win is seen boosting Elon Musk’s electric vehicle company

Published

3 days ago

November 6, 2024

Anne Joseph

NEW YORK (AP) — Shares of Tesla soared Wednesday as investors bet that the electric vehicle maker and its CEO Elon Musk will benefit from Donald Trump’s return to the White House.

Tesla stands to make significant gains under a Trump administration with the threat of diminished subsidies for alternative energy and electric vehicles doing the most harm to smaller competitors. Trump’s plans for extensive tariffs on Chinese imports make it less likely that Chinese EVs will be sold in bulk in the U.S. anytime soon.

“Tesla has the scale and scope that is unmatched,” said Wedbush analyst Dan Ives, in a note to investors. “This dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment, coupled by likely higher China tariffs that would continue to push away cheaper Chinese EV players.”

Tesla shares jumped 14.8% Wednesday while shares of rival electric vehicle makers tumbled. Nio, based in Shanghai, fell 5.3%. Shares of electric truck maker Rivian dropped 8.3% and Lucid Group fell 5.3%.

Tesla dominates sales of electric vehicles in the U.S, with 48.9% in market share through the middle of 2024, according to the U.S. Energy Information Administration.

Subsidies for clean energy are part of the Inflation Reduction Act, signed into law by President Joe Biden in 2022. It included tax credits for manufacturing, along with tax credits for consumers of electric vehicles.

Musk was one of Trump’s biggest donors, spending at least $119 million mobilizing Trump’s supporters to back the Republican nominee. He also pledged to give away $1 million a day to voters signing a petition for his political action committee.

In some ways, it has been a rocky year for Tesla, with sales and profit declining through the first half of the year. Profit did rise 17.3% in the third quarter.

The U.S. opened an investigation into the company’s “Full Self-Driving” system after reports of crashes in low-visibility conditions, including one that killed a pedestrian. The investigation covers roughly 2.4 million Teslas from the 2016 through 2024 model years.

And investors sent company shares tumbling last month after Tesla unveiled its long-awaited robotaxi at a Hollywood studio Thursday night, seeing not much progress at Tesla on autonomous vehicles while other companies have been making notable progress.

Tesla began selling the software, which is called “Full Self-Driving,” nine years ago. But there are doubts about its reliability.

The stock is now showing a 16.1% gain for the year after rising the past two days.

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Investment

S&P/TSX composite up more than 100 points, U.S. stock markets mixed

Published

3 weeks ago

October 16, 2024

Anne Joseph

TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.

The S&P/TSX composite index was up 103.40 points at 24,542.48.

In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.

The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.

The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.

The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.

This report by The Canadian Press was first published Oct. 16, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

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Economy

S&P/TSX up more than 200 points, U.S. markets also higher

Published

4 weeks ago

October 11, 2024

Anne Joseph

TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.

The S&P/TSX composite index was up 205.86 points at 24,508.12.

In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.

The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.

The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.

The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.

This report by The Canadian Press was first published Oct. 11, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

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