The Stock Market Correction 2018 has a lot of investors acting nervous, especially Millennial investors. After all, Millennials have some experience with stock market correction history, having witnessed the crash of 2008.
The market downturn this year has not been as bad as 2008, but it is bad enough to make some investors cringe. In fact, Millennial investment is still lagging behind other generations. Millennials are afraid of the market correction 2018. Some believe that stocks are simply too risky. In fact, an analysis from Nerd Wallet found that Millennials who avoid the stock market could miss out on $3.3 million in lost retirement savings.
Some Millennials might be wary of taking advice from older professionals. James Schramm, of Schramm Financial Group, is both a Millennial and a financial advisor. He offers a unique perspective than most other financial professionals.
Timing The Stock Market
Schramm says that any downturn is perfectly normal.
“A correction of 10 percent or more happens on average once a year and the last one happened roughly two years ago,” he told Money Selfie. “So we were ‘over due’ for a correction.”
Schramm advises his clients to focus on long term trends and economic outlooks instead of timing corrections.
What’s Behind The Market Correction 2018?
According to Schramm, tariffs and potential trade conflicts are the main factors behind the stock market correction 2018.
“While most economist believe tariffs are bad for the economy, which I would agree, the trade war that is beginning with the U.S. and China right now will have minimal impact on our economy,” Schramm told Money Selfie. “The correction has been an overreaction to trade policy as our U.S. fundamentals are on solid ground.”
Schramm also points to positive economic signs like low unemployment, new jobs every month, and rising wages. He also says that the manufacturing and real estate sectors continue to improve as well.
“While this trade war isn’t good for the economy, in the end this is more of a tiny blip on the radar,” he told Money Selfie. “But, the market is reeling back because we have needed some ‘bad’ news for a while to pull the reigns back on a ever growing stock market since Trump has been in office.”
The Best Advice For Millennials Investors: Focus On Long-Term Objectives
Millennial investors have a long time until they reach retirement. Schramm says that young investors can afford to ride out market corrections.
“Use corrections as opportunities to re-balance your portfolio, sell some of your safer investments, and reinvest in stocks now that the stock market is on a 10 percent discount,” Schramm told Money Selfie. “Most people say they want to buy low and sell high, but few do because they let their emotions get in the way. Use market pull backs to do so.”
Special thanks to HelpaReporter.com for this article.
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