No One Ever Made A Dime Panicking!

The last couple of weeks have been very tough for the stock market. Stocks have been under a great deal of selling pressure due to the trade war with China.

Last week I was talking with a friend of mine who urged me to “watch my stocks and be careful”.

I didn’t ask her what she meant by that, but I could pretty much guess that her advice would be to sell if the market got too volatile or scary. I certainly don’t think she was advising me to buy more stocks as the market went lower.

I then gave her the same advice that I give to readers of my blog: No one ever made a dime panicking!

From 1950 to 2019, the S&P 500 has gone up more than 100 times in value. During this same time period, the following events have taken place:

1. Nine recessions

2. The Korean War

3. Rising interest rates

4. The Red Scare

5. Kennedy’s assassination

6. The Civil Rights Movement

7. The Vietnam War

8. The OPEC embargo

9. Double-digit interest rate increases

10. The Beirut Embassy bombing

11. The U.S. bombing of Libya

12. Black Monday, in which the market fell 22%

13. The savings and loan crisis

14. The Iraq War

15. The housing slump

17. The Asia financial crisis

18. Long Term Capital Management’s collapse

19. The Russian financial crisis

20. The September 11, 2001 attacks

21. The Afghanistan War

22. The bank crisis

23. The housing Crisis

24. The European debt crisis

25. The China slowdown

26. Brexit

27. The US/China trade war

As you can see, we have seen our fair share of economic and geopolitical crises over the last 69 years. Yet the market has been extremely resilient.

In 1950, the S&P 500 was around 80. Today it is at 2,859.

If you look at the history of the stock market, you will see that there is absolutely no need to panic when we’re faced with something like the current trade war. I can’t tell you when it will end, but I can tell you that it will end.

Neither America nor China wants this to go on for years; economically, both nations have something to lose.

This is just another bump along the historical road – nothing more.

The biggest mistake you can make right now is to sell your stocks because of this short-term uncertainty.

Even if you own a company like Apple (NASDAQ: AAPL) or Starbucks (NASDAQ: SBUX) which has a lot of exposure in China, I would just sit tight and wait.

This too shall pass.

My book, The Stock Market is For Everyone, is a short guide for the beginning, inexperienced investor that is easy to understand and can be put into action immediately.

Click the image of the book at left to be taken to its Amazon page.  (Disclosure: As a participant in the Amazon Services LLC Associates Program, I earn a small commission on each sale generated through these links.)

 

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Stocks Are On Sale Again!

Two weeks ago, I was looking at a chart of the S&P 500 and it was approaching an all-time high. A few days later, it made an all time high. At that point, it seemed like the market would continue to make new highs.

Then the trade war heated up and sent the market into a tailspin.

It feels a lot worse than it is. The S&P 500 is only down 4% from its all-time high. That’s nothing, in the grand scheme of things.

Is the selling over? Maybe, maybe not. The truth is, I don’t know.

We could easily go down 6 to 10 additional percentage points. Or, we could rip to new highs. I wouldn’t be surprised either way.

No matter what happens, though, we here at Wealthy Joe think you should be buying this sale.

We don’t believe in trying to time the market. By trying to time the market, you can miss out on some of the biggest moves ever.

Historically, some of the biggest gains in the market come after some of the steepest sell-offs. It’s true!

Right now, the trade war between China and the United States has the market extremely nervous because of the impact a trade war will have on companies with significant exposure to China.

I can’t tell you when it will happen, but – this trade war will come to a resolution. It could be this year. It could be next year. But it will in both countries’ best interest to make sure that happens.

In the meantime, ignore the noise.

Buy great companies that will thrive in the future regardless of the trade war.

My book, The Stock Market is For Everyone, is a short guide for the beginning, inexperienced investor that is easy to understand and can be put into action immediately.

Click the image of the book at left to be taken to its Amazon page.  (Disclosure: As a participant in the Amazon Services LLC Associates Program, I earn a small commission on each sale generated through these links.)