Three Questions

THE BLUE CHIP stocks in the S&P 500 ended today down almost 18% from their September all-time high. Smaller U.S. shares and foreign markets have had an even rougher time in 2018. To get their higher reward, stock market investors have to shoulder higher risk. Guess what? This is risk.

It’s also looking increasingly like a decent buying opportunity.��If this turns out to be a full-fledged bear market, history suggests the peak-to-trough decline will be around 35%, so we could have a long way to go. Still, for the first time durning the current selloff, I did some serious buying both today and yesterday, moving 2% of my portfolio from bonds to stocks. If the stock market keeps falling, I’ll be doing even more buying in the weeks and months ahead.

But wouldn’t it be wiser to sit in cash investments until the markets settle down? What about the risk that interest rates will head higher, which “everybody knows” will happen? Wouldn’t it be smarter to hold off buying until stocks finish falling? I tackle these three questions in my latest article for Creative Planning, where I sit on the investment committee and advisory board.

Follow Jonathan on Twitter�� @ClementsMoney ��and on Facebook . His most recent articles include Just in Case,��No Kidding��and��Taking Us for Fools . Jonathan’s latest book:��From Here to��Financial��Happiness.

The post Three Questions appeared first on HumbleDollar.