5 Reasons to Pay Attention to the Stock Market This Week
“Set it and forget it.”
When it comes to personal finance, this is a popular catch phrase. It means that after you invest your money, you should stop thinking about it, because this can result in unneeded frustration and worry, or selling when the time is not right.
And it’s often wise advice, too: even Warren Buffet thinks we need to relax.
But let’s be honest. We shouldn’t completely ignore the stock market. We need to keep an eye on the stock market this week for a number of reasons.
1. Political Turmoil Can Drive the Stock Market This Week
In recent weeks, we’ve seen a volatile market. This is due, in large part, to the unstable political environment in the US. This includes not-so-diplomatic relationships with other countries and the threat of nuclear war.
When politicians can’t agree, and when relationships with other countries go haywire, investors want their cash safe in their hands. This means selling stock, which results in price drops.
It’s important for any investor to stay up-to-date on these global issues because it impacts your safety, your leadership, and your finances.
2. Upcoming Cash Needs
Buying a house or car in the near future? Or, writing a tuition check for the kids? If so, consider whether you need extra liquidity, which may mean selling investments when the time is right.
If you’re taking out debt (i.e. loans) to fund large purchases, remember the market can impact interest rates, too.
Need a regular cash flow? Check out dividend funds, which are a popular option for stock market geeks. They pay out monthly and are a popular source of income for many.
3. You May Be More Exposed Than You Think
Think you’re not invested in the stock markets? Think again.
You may have exposure to the market via overnight bank deposit sweeps’ employer pension plans, employer 401k matches, and 529 plans. Due to the complexities of these, many individuals don’t realize such plans actually have underlying investments.
We suggest familiarizing yourself with the fine print so you can understand and monitor your own exposure.
4. Markets Impact Employers, Consumer Products, and More
Going on a trip abroad soon? Consider foreign exchange rates, as these move daily with the market and may impact your decision to take out cash for your trip today or next week.
Even the cost of food is impacted by the stock market this week, particularly when we talk about mergers or buy-outs (e.g. Amazon & Whole Foods.)
Employers may announce hiring or cuts as part of mergers and buy-outs, too. This is crucial knowledge if you work for a public company.
5. Be Ready to Buy or Sell
The most important aspect in order to be ready to watch the stock market this week? You need to be ready to buy or sell at the right time.
Check stock prices against historical averages to see how things are looking these days. The only way to know if the “time is right” is to understand historical pricing trends. This goes for buying and selling. Remember: buy low, sell high.
Don’t get left behind in the dust, folks. The stock market isn’t only for “those other guys.”
Check out our site for tips on making your money work for you. You’ll be a market pro before you know it!