Carry On

The stock market has fallen somewhat sharply the past two weeks. This is normal. Markets go up. Markets go down. The point of investing is not to guess what they will do in a given day or month but having confidence that there will be more good days than bad ones.

I wonder if talking about the stock market going down is just creating more concern where there really shouldn’t be any. That’s not to say I like seeing a statement with a lower balance on it; I don’t. But when any of us put money to work in the stock market, we sign up for the occasional bumpy ride. It’s been unusually smooth of late but this latest drawdown is quite normal.

As a reminder, the US stock market (as measured by the S&P 500 index) increased in value by nearly 22% last year. It has had a positive return for nine straight years. That is to say, my second grader had not been born the last time the market had a negative year.

Finally, downturns can be a great time to invest. After all, stocks are not as expensive as they were a few weeks ago. I don’t know (and neither does anyone else) if the market will experience a sharp rebound to the positive, continue on a downward slope, or muddle around somewhere in between the two. But I do know that having a plan and discipline will lead to better outcomes than worrying about how many points the Dow Jones moves by in a given day.

So my advice is carry on and enjoy cheering on Team USA in the Winter Olympics.

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