However, trying to
determine the source of the volatility is not the question we should be asking
ourselves as investors. Volatility in stock markets is normal so the more
important question to ask is whether our portfolios (our individual CSS
retirement investments) are properly positioned for our own personal circumstance
and long-term objectives.
On the other hand,
members with a long investment horizon will need to take on investment risk to
generate appropriate long-term rates of return on their investments (including
in retirement if not purchasing a traditional monthly pension with their
holdings). These members will need to drown out the short-term noise and
recognize that any volatility happening in the short-term is just part of the
normal investment cycle. Sticking to their long-term investment strategy
will best serve these members in achieving an appropriate nest egg to support
their retirement spending needs.
All that said, we
recognize that it is not easy watching your portfolio value fluctuate from one
day to the next due to volatility in the stock market. Emotions can be
tough to overcome, but they can lead us into making short-term investment
decisions that may be harmful in the long-term.