Don’t walk, RUN! The market is on sale!
The S&P 500 has lost 15% of its value since the beginning of this year.
Market crash/correction sounds scary, when in reality, history has shown its just a blip on the radar long term;
I’m not discounting the fear, the fear is real and I’m here to say you are allowed to feel that, but do NOT let the media sway you, do not let friends talk you into changing ANYTHING! Do not talk to your neighbour and take their tips and make a move you will later regret. Do not move! Avoid emotional knee jerk reactions and filter out the noise to avoid mistakes. (See my earlier post around emotional investing)
Market corrections are a normal part of investing. Since 1928, we've had 26 bear markets (decline) in the S&P 500, and 27 bull markets (incline). Gains during bull markets far outweigh the losses of bear markets.
Remember, we are playing the long game, (your money SHOULD NOT be in the market if it’s short term - it’s too risky!) and when investing for the long term this now provides you an opportunity to buy more shares at cheaper price to realize gains later.
Statistically, stocks lose an average of 36% in a bear market and gain an average of 114% in a bull market.
I read a great analogy today;
“When the shoes you love go on sale, we probably buy another pair in a different colour! We don’t try and sell our loved shoes at a discount”
Or how about this one;
“when you were dating in high school, and your partner broke up with you, At the time it’s devastating. 10 years later it’s pretty insignificant overall”
Bear markets can be an opportunity instead of panic! An opportunity to buy at a cheaper price.
If you are anxious and unsure this is the time having an advisor will pay dividends, reach out to them, or they should be reaching out to you to check in and smooth concerns. I went through the crash in 2008 with my clients, some unfortunately fear got the best of them, no matter what I had to say and they chose to cash in never recouping the loss, while the majority has a distant memory stayed invested for the long haul and reaped the rewards especially in 2013!
Albeit it was a bumpy, emotional and tremulous time for all involved - as an advisor we have our finger on the pulse, let us do what we do best.
You can refer to this graph for the bull (green) and bear (red) markets to show the history of the market and after a bear, always follows with a bull market to capitalize on.
