How Often Do Markets Decline?

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.

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