The stock market has its ups and downs. And the downs are certainly much more unnerving than the ups.
Currently, European markets are getting slammed and U.S. futures are sharply lower.
As of yesterday’s close, the S&P 500 is down by around 1% from its recent all-time high of 1,985.
And if history’s any guide, the stock market could see much more red before the year’s over.
According to JP Morgan Funds’ David Kelly, since 1980 the S&P 500 has seen an average intra-year decline 14.4%. And this year, the difference between the top and bottom is around 6%.
But the real message here is not that we should panic and fear a big crash. Rather, we should recognise that 5% pullbacks, 10% corrections, and even 20% bear markets are all just a part of a investing in a stock market that over the long run seems to go up.
Sell-offs happen. And sometimes they’re big. But they’re normal. And they’re certainly no reason to just bail out of the stock market.
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