The Investing Roller Coaster

The view from my front seat on Fury 325

My daughter Savanna and I love roller coasters.  The bigger, the faster,  the scarier the more we love them.  A couple of weeks ago we spent some daddy daughter time at Carowinds in Charlotte.   They have a brand new roller coaster named Fury 325.  The name is certainly fitting as the coaster brings you up 325 feet in the air and then drops you at an 85 degree angle at speeds of almost 100 miles an hour. It then takes you through a series of hills, fast turns and multiple G force drops before it brings you safely back to the station.  It is a thrilling ride! One of the best roller coasters I have ever experienced.  We loved it so much that we rode it 10 times during our visit.

So what does this story have to do with investing?  Recently we have seen volatility return to the stock market.  On August 18th 2015 the Dow Jones Industrial Average closed at 17,511.  Five trading days later on 8/25 the DOW closed at 15,666.  That was a 10% decline in just 5 days.  On August 27th the DOW closed at 16,654 and almost 5% rebound in just two days.   We have not seen that kind of volatility or decline since March of 2011.

As I was talking with clients about what was going on during those few days I was reminded of two things from my recent amusement park trip.  The ride can be very scary while you are on it, just like extreme market volatility can be frightening to clients.  The second thing I was reminded of is that you can only get hurt on the roller coaster if you jump out while it is still moving.  The same thing applies to investing if you begin to deviate from your long term investment plan.

So keep your hands and feet in the car at all times, remain seated until the ride comes to a full complete stop and enjoy the ride!

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. Investing involves risk including loss of principal