The stock market is an unpredictable and emotional business to be in, Mike Crego told the Seven Hills Rotary Club on Tuesday.
Coupled with influential economic and psychological factors, the market has been “volatile,” said Crego, senior vice president of investments at Wells Fargo Advisors.
“We feel like this volatility is going to continue to be a factor for investors for years to come,” he said.
He referenced last week’s risky financial environment, mapping out the different factors that came into play.
“The S&P credit downgrade … was a huge factor, the timing of it more so than anything else,” said Crego. “We thought is was coming, but we didn’t expect it to be last week.”
He continued to expand on other factors that have affected the market.
“The debt negotiations and the lack of commitment in Washington to really be serious about addressing this issue probably weighed on investors’ minds,” he said. “The Greek and European debt crisis is a factor as well.”
But Crego remained optimistic, pointing to low interest rates, good productivity and rising inventory numbers. During this unpredictable time, he advised investors to stay diversified, balanced and patient.
“We feel like the best way to address the unpredictability of the financial market is to have a disciplined, diversified portfolio that includes exposure to stocks, bonds, perhaps gold and real estate,” he said. “Have plenty of acuity for short-term emergencies and stay with a diversification mix that meets your objectives.”
Crego ended his presentation with valuable advice to the younger generation.
“Don’t spend more than you make, invest as early as possible and stay disciplined,” he said. “If you do those three things as a young person, you can really set yourself up for a good financial future.”