I like this quote from this article, “These kinds of corrections are a normal process. Where the bottom is I don’t know but the fundamentals haven’t changed.” The term fundamentals is referencing the overall fundamentals of the U.S. (and global) economy. But I think you should look at your own fundamentals. And those are your reasons for owning stocks. For those of you a couple decades away from retirement, you have a heavy stock exposure because your fundamentals are ‘I want to grow my retirement pie as big as possible, therefore I have to stay calm throughout the craziness and I know I’m going to see a lot of it on my road to retirement.’
For those of you in retirement now, your fundamentals for owning stocks are ‘I can’t leave all my money in cash cuz inflation is going to eat away at it, so I need a balance of protection with a little bit of growth, too.’ Protection comes in the form of investment grade bonds which will continue to generate income for you during calm and crazy times, and historically have shown to do well when stocks do poorly (though this is not always the case). Growth comes from the right mix of a globally diverse stock exposure which will go down in value when the market goes down, but you’re not going to feel too much pain because it’s a smaller slice of your retirement portfolio. And when stocks go down Pensinger Financial takes a bit of your bond money and buys good companies while they’re on sale; over the long-run you buy low and sell high that way and that’s one way to generate growth from your stocks.