Historical data shows that the US stock market has consistently produced positive returns.
It’s not uncommon for the stock market to experience dips and slides over a few days or even months. Such occurrences often lead investors to anticipate a year of losses. However, historical data shows that the US stock market has consistently produced positive returns despite these periodic downturns.
Eventual positive annual returns
Consider this, intrayear declines for the index have varied widely, from a modest 3% drop in 2017 to a substantial plunge of 49% in 2008. But here’s the catch – many years that witnessed large intrayear declines eventually saw positive annual returns. In fact, in 17 of the past 20 years, US stocks ended up with gains for the year.
Volatility, a normal part of investing
One needs to understand that volatility is an inherent part of investing. Market tumbles, while unnerving, should not come as a surprise. This is why a long-term focus is crucial for investors. It helps maintain perspective during these downturns and prevents knee-jerk reactions.
Guarding against market uncertainty
Adopting a long-term investment strategy can help you navigate the stormy market uncertainty. Remember, it’s not about timing the market, but time in the market that counts.
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THIS ARTICLE DOES NOT CONSTITUTE TAX OR LEGAL ADVICE AND SHOULD NOT BE RELIED UPON AS SUCH.
THE VALUE OF YOUR INVESTMENTS CAN GO DOWN AS WELL AS UP AND YOU MAY GET BACK LESS THAN YOU INVESTED.
THE TAX TREATMENT IS DEPENDENT ON INDIVIDUAL CIRCUMSTANCES AND MAY BE SUBJECT TO CHANGE IN FUTURE. FOR GUIDANCE, SEEK PROFESSIONAL ADVICE.