When will my stocks come back? Asks everyone. Good question. Typically, when markets sell off in disruptive events like these, they can self-correct rather quickly. But the correct answer is that no one really knows how long it will take.
It’s why Your Survival Guy writes to you about working to make money and investing to keep it. In other words, don’t rely on a stock or market to do something for you. Don’t rely on it to help you reach that certain level of wealth that will make all your dreams come true. Because when you do that, you set yourself up for disappointment.
The market doesn’t care about anyone’s dreams or desires. With all of that said, and getting back to typical recovery time for markets, it’s important to realize that geopolitical selloffs don’t normally last that long.
Vanguard found that of the three 5% geopolitically induced selloffs since 1962, including the Cuban Missile Crisis, the Soviet Invasion of Afghanistan, and the Brexit vote, all three had recovered within six months, by 21%, 6%, and 7%, respectively.
Attempting to time the market in times like these could be hazardous to your portfolio health.
You can see in the chart below that since 1980, over half of the market’s best 20 days of performance occurred in years with negative total returns. Investors who sold everything when the going got tough could have missed the snap back in stocks the rest of the market enjoyed.
Action Line: Investors who have a diversified portfolio and a plan for retirement are better prepared for market volatility. When you want to talk about your portfolio, bonds, gold, and a plan for retirement, email me at ejsmith@yoursurvivalguy.com. And, click here to subscribe to my free monthly Survive & Thrive letter.
