This past few trading days has seen the market take some hits. Today has been no different.
While most panic and sell, we must remain calm. Remember why you invested in the first place.
In the short-term, the market is a voting machine. In the long-term, it is a weighing machine.
The reputable assets you hold, such as a S&P 500 index fund, mutual funds, or a diversified collection of industry leaders, will continue to produce for you, if you give them a chance to grow.
Imagine your favorite clothing or electronic store offering all their best clothes or electronics off for 30%, 50%, or even 70%. Now picture that’s the stock market when corrections and crashes occur. Would you not rush in to purchase more of your favorite clothes (mutual funds) while they’re on such a great sale? You’re getting more for your hard earned dollars. I would not rush in, but would DCA ( dollar cost average ) in good markets and bad.
The key to winning is consistency and you must do this over and over, contributing a regular amount every paycheck or month. When shares drop, you’ll buy more with the same amount. To turn an even bigger profit, invest more than you usually would when your shares drop at such low values.
If you believe in American business, its resilience and ability to keep growing, then the stock market will reward you.
Take a look at this chart. It shows, historically, that time tells all:
Looking ahead… many analysts advise taking a breath before you consider dumping your entire stock portfolio—if only to see the whole picture. They point to a still-strong US economy with relatively low unemployment and higher-than-expected GDP growth last quarter as signs that the market chaos might be temporary. One promising sign: Japan’s stocks have already begun to rebound.
Bottom line: Don't panic based on what the news "talking heads" spout. No one has the "crystal ball" to predict the future. But history has shown that, despite market swings, investing is has been (and still is) the best opportunity to grow your assets.