By James E. Wilson via our partners at Iris.xyz
As most of us discovered in South Carolina’s historic flood, it is best to prepare for extreme conditions when everything is calm. The same principle applies to how we think about our investments. It is good to become emotionally prepared for market price variability when all is well.
The S&P 500 Index has declined 10% or more 28 times since 1950; 20% or more nine times; and 30% or more five times during this period. The flip-side is that the S&P 500 was valued at about 17 on January 1, 1950, and is at about 2100 now. The intervening years have brought about all types of scares and random events but the upward trend has continued despite all of those headwinds. There are three keys to keeping your cool when markets turn south.
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