By now you know that market timers and traders were spooked once again, causing a downward ripple across the U.S. investment markets. What startled them? Press the play button to find out.

The U.S. economy does seem to be experiencing a slowdown that could (emphasize could) lead to a recession. The problem for investors, though, is that the stock market tends to be a leading indicator of economic slowdowns, rather than something that follows on – meaning that, in the past, markets have recovered during recessions as investors start to see the light at the end of the tunnel. This makes predicting future market movements, using economic data, virtually impossible.

Plus, of course, predicting anything based on a startling of the herd of market timers and active traders is patently impossible. It’s natural to look at returns this year and want to stop the bleeding, but that would mean selling and taking the risk that the markets will suddenly startle in the opposite direction as traders and market timers experience a sudden fear of missing out on the next upward movement.

People who have the fortitude to stay invested when stocks are on sale tend to come out the other side with higher account balances. This can be seen on the historical return chart, which not only shows the steady, incremental rise in stock values due to the daily efforts of millions of workers in tens of thousands of companies, but also how unpredictably the timers and traders can move the markets in the short term.  Their impact is volatility and anxiety, not consistent wealth-building returns.

Disclosure Notice: The Wealth Conservatory® is a Registered Trade Mark of Comprehensive Planning Associates, Inc. - a Registered Investment Advisor with offices in New Hampshire, California, and Missouri. The Conservatory is not licensed to and does not engage in the practice of rendering legal or tax advice. Any discussion of either is for informational purposes only and you are strongly encouraged to seek appropriate counsel prior to taking action. The Conservatory and its representatives are in compliance with the current registration and notice filing requirements imposed upon SEC Registered Investment Advisors by those states in which the Conservatory maintains clients. The information contained herein should not be construed as personalized financial or investment advice unless the recipient has an executed and active client or member engagement with the Conservatory. The Wealth Conservatory® is a Registered Trademark of Comprehensive Planning Associates, Inc. Thank you.