It Pays to Stay!
16 Dec 2015
It’s easy to let the emotions of greed and fear drive our investment decisions. I once heard another financial professional say, “We don’t have people with investment problems, we have investments with people problems!”
I do see some truth to this. To be fair though, it’s easy to see why investors repeat bad investment behavior. After all, we are human. I mean, if somehow we could remove the emotions of greed and fear, I do believe investing would become easier. But we all know that this won’t happen anytime soon.
Let’s look at the chart below provided by First Trust and sourced from Bloomberg.
The key point is that the majority of the time, after a major 1 day decline in stocks (S & P 500), the index was substantially higher after 1, 5 and 10 years. While stocks have often experienced extreme volatility in the short term, I believe investors are better served committing to their longer term goals. Of course, past performance is not a guarantee of future results…