This summer has burned investors, and no amount of SPF -- stock protection factor -- has been able to soothe their sores.
Investor sentiment is highly negative, with 42% of respondents to the latest American Association of Individual Investors survey in the bearish camp. Investment advisers, too, are more pessimistic about the economy and stocks than at any time in the last 16 months.
Even hedge-fund managers, who you'd think would be cool and collected in these challenging times, are on edge. Just 17% of hedge-fund managers are bullish on the prospects for Standard & Poor's 500 stock index, and almost half are down on stocks in general.
What's an individual investor to make of all this gloom and doom? For starters, you can tune out the noise and enjoy the coming Labor Day weekend. Use the down time to review your portfolio and your short-term and long-term investing goals. Are you on track? If not, figure out how you're going to be proactive about your finances. Research stocks, mutual funds and exchange-traded funds that look attractive, and start putting money into them little by little.
If you do just that, you will find relatively quickly that you are becoming more confident about your money. In time, your confidence will increase. And with greater self-assurance and control over your investment decisions, you will find yourself less anxious and less reactive about markets and investing. Then you can develop perspective on Wall Street's day-to-day fluctuations, and ignore the "act now or it's too late" mentality that only makes others rich. Most importantly, you'll be able to answer, firmly and loudly, when opportunity knocks.
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