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NASHVILLE, TN (WSMV) –
The stock market shattered yet another milestone on Wednesday.
The Dow Jones Industrial Average reached 22,000 points for the first time. Markets have been on a steady upward trajectory since last fall.
What does all this mean for people in Middle Tennessee?
Advisors are quick to say, we’ve hit market highs in the past. They encourage people to have a strategy and stick to their financial plan.
“This should just be business as usual,” said certified financial planner Troy Von Haefen. “I often tell my clients, we need to step back and realize and look at how far we’ve come.”
Von Haefen said hitting 22,000 doesn’t mean people need to start buying and selling like crazy.
“One of the best ways to continue on is in your retirement plan and your 401k plan,” he explained. “It’s automated, so you’re taking a dollar-cost averaging approach.
“It’s going to save you tax dollars,” he added.
While everyone Middle Tennessee has a different plan, people should be cautious when looking at new stocks to purchase.
“Just because it did well last year, doesn’t mean it’s going to do as well going forward,” Von Haefen said. “We want to be buyers in the market. If the market is going up, or the market is going down, we need to continue to buy.
“We’ve been touching new highs over the last year or so. If we told ourselves we’re at a high and need to pull back our investment, we would have lost all the growth between then and now,” he added.
Dr. Arthur Laffer is the founder and CEO of Laffer Associates, an economic research and consulting firm based in Nashville.
“I believe this is just the beginning of a long, 10 year boom in America,” Laffer said.
He believes the market continues to rise, due to the possibility of tax cuts in the near future.
“That tax rate cut will more than pay for itself. It will pay for itself three or four times over,” Laffer said. “We’ll have state and local revenues soaring as well as other tax revenues such as income taxes, payroll taxes, all of those will increase because of growth.”
Ultimately, Laffer believes people should stay the course.
“What we should do is just live our lives,” he said. “We’ve got the lowest taxed state in the nation. We’re one of the fastest growing states in the nation. Tennessee is the single best state in the nation, bar none, and there’s some pretty good ones out there.”
Advisors say we should look at the economy like a cruise ship. It will take a long time to turn around, and it’s a slow moving process.
They encourage people to be patient and continue to think long term.
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