No one can argue with the fact that we’ve seen extreme volatility in the stock market over the past week. At times like this, it’s not uncommon to feel fear and panic. We’re all human and too many of us have lived through challenging financial crises in the past. While I can’t predict the future or tell you definitively that everything is going to absolutely be alright, I think it’s critically important to keep a few things in mind during this time.
In addition to these events, our market is finally nearing correction territory, and this is a correction that is long overdue.
The stock market won’t go up forever without a few bumps along the way. It’s time for the market to pull back a bit and this is a normal part of the process. Corrections are also temporary. History tells us that since 1965 markets that correct between 10% and 20% take less than six months to recover.
This is not the time to panic, but it is the time to be sure that you have a well-balanced, diversified portfolio. If you have the right mix of stocks and bonds, you have a buffer against losses during times like this. Trust and be confident in your original investment strategy.