For many investors, their biggest enemy is their own emotions. If you let emotions guide your investment process, you will often make the wrong decision at the wrong time.
Market volatility is part of investing. You will (not might) get statements from time to time that test your resolve. It takes courage not to react with emotion, but those who exhibit that courage will be rewarded for it.
During periods of market volatility, it is important not to panic. Stay focused on your long-term goals and either stay put or potentially even buy more to take advantage of the volatility.
During the Coronavirus pandemic, we experienced a period of extreme volatility. In just a five-week period in 2020, from mid-February to the second half of March, the S&P 500 went down by over 33%.
Many financial talking heads predicted the recovery would take years, but the truth is nobody knew. The market ended up fully recovering less than five months after it hit the bottom. If you had panicked and pulled out of the market when things felt bad, you would have missed a tremendous run of growth.
Want more proof that patience pays off? The markets today continue to hit all-time highs. That tells us that it has fully recovered (and then some) from every period of volatility it has ever faced. Ever.
What to do during times of volatility:
- Don’t panic.
- Stay patient.
- Call your financial advisor if you have concerns. They will be happy to talk through with you what is going on and make sure you are comfortable with your long-term investment plan.
Have questions or concerns about the market? Ever Wealth is here to help! Contact us today.