What Market Correction?

by | Apr 8, 2007 | Investment

stock-market-up.jpgAbout a month ago, on February 27th, the Dow Jones industrial Average lost over 400 points. The talking heads were predicting the beginning of the end. Investors featured on financial news shows had no idea where to invest next. Everyone was in a stupor–except seasoned investors, who took the one day crash in stride…..and did nothing.

For those of you who sat on your hands and did nothing, once again your investment maturity paid big dividends. On Thursday, just a tad over 30 days later, the Dow had regained the 400 points it lost. And, not only had the Dow bounced back, so had most foreign stock markets, including the Shanghai Composite Index, which has now hit new highs.

Of course, this is not to say markets always go up. They don’t. Markets do have bear markets. However, the average bull market is around three times longer than the average bear market. The evidence strongly suggests that investors who “buy and hold,” rather than panic and sell, come out way ahead.

Print Friendly, PDF & Email