Coping and Investing in a Volatile Market

Oct 21, 2014

Credit Perpetual Tourist / Flickr

The American economy has experienced gradual improvements in the 6 years since the 2008 market collapse. But for many investors, memories of those economic losses are still raw.

Throughout the last month, the volatility of global politics has affected the stock market with disconcerting spikes and dips.

Financial planners such as Paul Brahim, Chairman and CEO of BPU investment firm and a member of the Board of Directors of the Pittsburgh Chapter of the Financial Planning Association, are faced with concerned investors who want to know what they’re in for. He joins us to talk about the causes of the latest market volatility and how best to react.

Brahim notes that the market has been dominated by worry for the last several months -- worry stemming from events like the polar vortex, ongoing upset in the Middle East, the tapering of the Fed’s bond-buying program, Ebola, and so on. According to Brahim, the market volatility is not caused by the events themselves but rather by hasty, frightened reactions to them on the part of cautious investors. Moving forward, Brahim suggests that investors need to think about four major questions: “Do I have enough? How do I make it last? How do I protect it? And, how can I pass it on?”