Jeremy Siegel for Time reports that history shows that excellent returns are available to stockholders who survive such rough patches. In fact, following the 13 10-year periods of negative returns stocks have suffered since 1871, real returns over the next 10 years have never been negative and have averaged more than 10% per year.
Why limit yourself to single stocks, though? ETFs are a good tool to capture the market’s rally:
- They lower risk by holding a number of stocks focused on a sector
- They add diversity to your portfolio
- On average, they cost less than mutual funds
If you remain skittish about entering into the markets, take a step back and think about your strategy. Set points at which you will buy, hold and sell, and then stick to it. The best investment strategy in the world does no good when it isn’t used. [How to begin a solid ETF investment strategy.]
For more information on strategy, check out The ETF Trend Following Playbook.
For more stories about trend following, visit our trend following category.