top of page

The Most Important Thing I Read Today; from My Kiplinger's Online Alert: DON'T SELL YOUR STOCKS!

Even when it hurts, hanging on during market routs pays off.Risk is the price of admission into the stock market. But a by Schroders' Duncan Lamont, head of research and analytics, reminds investors that, when it gets painful, it's still worth holding on to your ticket.


Lamont points to 11 stock-market declines of at least 25% between 1871 and 2019. In each case, no matter how much more the market fell, investors who stuck to their stocks after prior 25% drops were made whole years earlier than investors who sold and went to cash at the 25% point ("cash" returns were calculated based on short-term Treasuries).


The disparity was massive in the 1929 cash: "Stick-with-stocks" investors recouped their losses after 15 years, while it took cash holders 34 years to catch up. While the "stick-with-stocks" crowd recovered their losses in less than five years following the 2001 and 2008 crashes, "dash-for-cash" investors who never returned to stocks are still underwater. Every investor's personal situation is different, but the data shows that sticking to your guns ultimately works.




10 views

Recent Posts

See All

Comentários


bottom of page