Important Considerations for Investors with S&P 500 Near Record High
Top Mistakes to Avoid for Investors Now
Investors should mind these pitfalls with the S&P 500 trading near its record high. The S&P 500 advanced 24.2% in 2023 as signs of economic resilience made investors increasingly confident in a soft landing, a scenario in which the Federal Reserve successfully brings inflation under control without causing a recession.
Market Performance and Historical Trends
- Mistake 1: Avoiding the stock market or selling stocks without good reason
- Isaac Newton once said, 'What goes up, must come down.' That axiomatic statement is irrefutable where gravity is concerned, but investors should never apply that logic to the financial world. The stock market is not obligated to decline after moving higher.
- Mistake 2: Falling prey to fear of missing out
- There is a second mistake, no less dangerous than the first, that investors must avoid: falling prey to fear of missing out (FOMO).
To be clear, the worst mistake investors can make right now is avoiding the stock market or selling stocks simply because they are worried about a possible correction. Falling prey to FOMO can lead investors to make decisions without considering fundamental factors. Understanding valuation is crucial before making investment decisions.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.