Does it pay to stay invested when markets fall?
Investing Insights Market Future money management investment strategy global perspectivesDoes it pay to stay invested when markets fall?
In stock market downturns many investors are relieved to be on the sidelines. But then this worry often sets in -- If I'm not invested how do I reach my financial goals? One way to answer that question is to look at what would happen if you simply ignored all the end-of-the-world headlines and stayed invested. Clearly, you would have come out further ahead. In fact, even with 30 years of ups and downs global stocks have returned 9.2% annualized -- and that's with three bear market declines of as much as 44.9%
When markets fall remember what history tells us : for long-term success, it pays to stay invested.
Time in the market is time well spent
When markets turn negative our instincts often tell us to sell now and buy again later. That may seem logical, but how do you pick the right time to exit or re-enter the market? Because rallies can sometimes come in surges measured in days not weeks, being out of the market for even a few days can cause lasting damage to your portfolio.
long term investment success starts with a simple yet powerful strategy :
stay invested, no matter what happens in the markets.
Kyle A. Stevenson, CIM, Financial Advisor