Wikipedia defines hypochondria as a condition in which a person is excessively and unduly worried about having a serious illness. Hypochondriacs become unduly alarmed about any physical or psychological symptom they detect, no matter how minor the symptom may be, and are convinced that they have, or are about to be diagnosed with, a serious illness.
The same problem can affect investors who become unduly alarmed over minor fluctuations in markets or their portfolio, and are convinced that the situation needs to be aggressively addressed through immediate action. This is not to suggest that investors should ignore major events, such as the onset of war in Ukraine. However, no matter how serious the situation may appear, a cautious approach, perhaps with the help of your advisor(s), should allow you to calmly assess the potential effect on your investment objectives.
Looking back, the major market averages have made steady progress, albeit with some material hiccups along the way. There is nothing like experience to help in assessing new information and events. Here at Sigma, we bring a broad range of experience in the financial markets, from our newest teammates, just starting their careers, to our senior member with more than 65 years of financial experience. To borrow from the Farmers Insurance advertising campaign, “We know a thing or two, because we’ve seen a thing or two.”
All comments and suggestions are welcome.
Walter J. Kirchberger, CFA