Depending on how old you are, you may have only experienced a time when the stock market went up. For people that may have started investing in 2010 or afterward, this week might be very scary.
However…market sell-offs like this one are a very healthy and necessary part of the stock market.
Since 1900, the Dow Jones Industrial Average has fallen 5% or more at least three times per year. It falls 10% or more approximately once every year. It declines 15% every two years, and a 20% decline happens every three and a half years. The average duration of each decline is less than a year.
Overall the market rises three out of every four years.
This is why you have to stay invested and not try to time the market.
Have a good weekend! If you haven’t yet, please pick up a copy of my book, The Stock Market is For Everyone. It’s a short read that will provide beginners to the stock market with all the information needed to get started investing. If you know someone who isn’t invested yet, pick up a copy for that person! With stock prices lower, now is a great time to pick up those first shares.