Don’t Try to Time the Market
PROBLEM: Research has shown that losses feel twice as bad as gains feel good.
SOLUTION: Keep in mind that fleeing the market to reduce losses could mean losing out on gains when stocks recover.
The Market Has Shown Resilience
Every S&P 500® downturn of about 15% or more since the 1930s has been followed by a recovery.
Recoveries Have Been Strong
Returns in the first year after each market decline ranged from 36.16% to 137.60% and averaged 70.95%. Over a longer term, the average value of an investment more than doubled over the five years after each market low.
Don’t Miss Out on Potential Market Rebounds
Although recoveries aren’t guaranteed, taking your money out of the market during declines means that if you don’t get back in at the right time, you’ll miss the full benefit of market recoveries.
The Bottom Line?
Consider staying invested and not trying to time the market.