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April 4, 2012 | | | Investing Challenge #4—Quarterly Review | | | The first quarter of the 2012 Investing Challenge is officially behind us. You've committed socking away an extra $300 a month for retirement by eating out less, working some overtime, and trimming your budgets.
Since stock market performance and economic news influence how we feel about investing, we'll take a look at the last three months and address some of your concerns about investing in today's stock market.
A Positive Start
The Dow Jones industrial average, one of the stock market's measuring sticks, is up about 8% from its open in January. In February, the Dow closed above the milestone mark of 13,000 for the first time since May 2008. That's more than a thousand points off the high set in October 2007, but it's also double the low of March 2009.
The economy seems to be strengthening as well. Even though the unemployment rate remains high, more employers are hiring, and many Americans are starting to feel optimistic about their job prospects and financial situations.
All that growth means your retirement investments are growing too!
Investors Still Nervous
In the media, rising gas prices, Europe's debt problems and political wrangling in the U.S. topped the headlines. Many investors still connect these problems to the stock market slide of 2008. Even some of our readers asked if they should be concerned about the effects of Europe's troubles on their investments.
Our answer: No! And here's why.
In December last year, skittish investors pulled $19 billion from their mutual funds. Those who didn't reinvest that money missed out on the 8% rally over the last three months. And that's just a fraction of what the investors who sold off their mutual funds at the bottom of the market in 2009 missed as stocks doubled over the next three years.
The fact is there will always be some "crisis" tempting you to be "safer" with your investments. From the collapse of Enron in the early 2000s to the savings and loan bailout in the 80s and on and on, there has always been a "crisis" to worry investors.
Despite the market's day-to-day volatility, its overall trend is sustained growth. That's why Dave says to invest for the long term and ignore short-term shake-ups.
Expert Advice to Help Overcome Your Challenge
Stop sitting on the sidelines! If you need a sign to know it's time to start investing, consider the Investing Challenge your sign! Start with $300 a month or add $300 to the amount you already invest.
This isn't something we're taking lightly—and you shouldn't either. Consult an experienced advisor who can answer your questions and help you build an investing strategy you can feel confident about. One of Dave's investing Endorsed Local Providers (ELPs) will give you the same great advice Dave would. Contact your ELP today!
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