Key takeaways:
- Market volatility can feel unsettling, but history reminds us that, despite inevitable dips, markets have grown over time.
- Investors naturally look for signs of recession amid periods of volatility, but it’s important to remember that the markets are not the economy. Rather, they are forward-looking pricing mechanisms, which means they often bottom during recessions – not after.
- Attempting to time investment decisions around market dips can lead to missing out on the recovery. Strategically managing around a market decline can help cushion the ride and make it easier to stay the course.
Volatility is one of the few constants in investing. Markets rise and fall, often without warning, and those swings can feel unsettling – even though they’re perfectly normal. Every downturn can feel like this time is different, but history reminds us that, despite inevitable dips, markets have grown over time.
One of the most striking realities of investing is how frequently markets experience meaningful pullbacks – even in years that end up solidly positive.
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Past performance is not a guide to future performance. The value of an investment and the income from it can fall as well as rise and you may not get back the amount originally invested.
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