This big selloff is what stock market investing is all about ๐๐คฎ
Short-term volatility and long-term gains ๐๐ค
While the stock market usually goes up over time, it doesnโt only go up.
As of Mondayโs closing price of 4,296, the S&P 500 is down 11% from its January 4 high of 4,818.
For context, the S&P has seen an average annual max drawdown (i.e., the biggest intra-year sell-off) of 14% since 1950. In other words, big stomach-churning sell-offs are typical, and the one weโre currently experiencing is just below the historical average.
This all speaks to two conflicting realities investors must cope with: In the long run, things almost always work out for the better, but in the short run, anything and everything can go wrong.
Accepting that the market can be volatile is what investing is all about. Itโs the price investors pay for long-term riches.
It also means fighting the temptation to sell at what may be precisely the wrong time.
A tempting, yet dangerous time to sell
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