We’ve all seen the headlines declaring that “markets are in a free-fall”. We don’t dismiss the anxiety that market corrections may cause investors and we want to provide a few points to remember in times like these:
First, market corrections are completely normal. In fact, over the last 35 years, the average intra-year drop from a market high to a market low is approximately 14%. The current volatility is well within this normal range.
Second, maintaining your discipline during times of volatility is critical to investment success. Your investment strategy must be driven by your investing goals – not by short term movements in the markets. It is important to remember that the capital markets have consistently rewarded the disciplined investor who endures these normal periods of market volatility.
Lastly, please remember why the media is in business: to generate ratings that sell more advertising. The old adage that “bad news sells” is very true. As you have no doubt already seen, and will continue to see, the media will use “breaking news” alerts and special coverage to wring the ratings out of this market downturn. You should also expect the media to feature various “experts” offering all sorts of predictions. But we all know those predictions have nothing to do with maintaining a long-term prudent strategy for investment success.
As always, we appreciate your trust and confidence. Please let us know if you have any questions.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. Indices are not available for direct investment; therefore their performance does not reflect the expenses associated with the management of an actual portfolio. The index returns above assume reinvestment of all distributions. This information is for educational purposes only and should not be considered investment advice or an offer of any security for sale.