How can you maintain the confidence to stay invested despite inevitable and uncomfortable periods of market volatility?
While it is true that nobody can predict when markets will turn — in either direction — it is certain that asset values will both rise and fall, and that global equity markets will experience volatility from time to time.
Sticking with your long-term investment strategy is always the best course of action, but it can be tempting to sell equities as prices fall and wait for the storm clouds to clear. The devil, however, is in the volatility details: decades of stock market research reveal the steep cost of missing the best days, which tend to cluster around the worst days.
A better, and ultimately more successful, approach is to focus on aligning the risk in your portfolio to your unique financial goals. To help you make better investment decisions in the face of inevitable periods of heightened market volatility, we analyzed historical market patterns and offer five charts that illustrate why staying the course is often the best course of action.
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