It pays to invest for the long term...
When markets are volatile, it is tempting to exit the market or switch to cash in an attempt to avoid further losses.
Though short term volatility in the markets can be disturbing, we should remember investing always involves an element of risk, which is heightened during periods of turbulence and economic uncertainty. During these times, as we’ve seen in previous periods of volatility, one of the most important things to do is remain focused on your long term plans.
Historically, investors who stayed true to their long term plans through periods of decline have seen their investments go on to recover and then prosper.
Below you can see how some of the most notorious market downturns of the past century, along with their subsequent recoveries, have affected overall market growth.
In the words of the 1939 mantra, KEEP CALM AND CARRY ON.
Source: Ibbotson Associates SBBI U.S. Large Stock Index. © 2020 Morningstar as at 30 September 2020. The information 220-1844/FS.QFP.PTIFLT.01/February 2021 provided is for illustrative purposes only and doesn’t represent the past performance of any particular investment