By Graysen Blazek via

All of the excess daily noise notwithstanding, your ability to achieve financial goals boils down to two things: The first, can you accept normal market swings?; The second, can you stay invested in order to participate in long-term returns?

Almost everyone says yes to these two questions without examining what “normal” really means. In the average year, the broad stock market, (S&P 500), declines at some point during the year by about 14%. Yep, move along, nothing to see here. Moreover, about every six or seven years, the decline is roughly double that (25%+). Despite “normal” declines, the S&P 500 is positive in about 75% of the calendar years since 1980. You need to be able to “stay in your seat” when these inevitable twists and turns occur in order to fund long-term personal goals.

Being able to withstand temporary setbacks is at the core of becoming a long-term investor.

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