Be An Elephant And Downplay Talk Of Bulls And Bears
Published Wednesday, June 4, 2014 at: 7:00 AM EDT
A funny thing happened during the recent run-up in the stock market: People began to forget what happened in 2008. That's when the market started a downward spiral that lasted almost two years before bottoming out and beginning the long crawl back.
Now that about five years have gone by, many experts are predicting that the recent bull market will continue, perhaps for several more years. On the other side of the coin, some naysayers are expecting a market correction, maybe one of significant proportions.
No one knows for sure what will happen next. But it helps to look back and remember both the good and the bad.
During the last financial crisis, the Standard & Poor's 500 Index took a walloping, declining by about 37%. But then the S&P 500 rebounded and was up about 25% annualizedd over the five-year period. The hopelessness and panic that gripped investors have given way to euphoria in some circles.
It's far better to keep an even keel. If you've been afraid to reenter the market, be aware that equities historically have proven to be a sound investment. Yet that's no reason to go overboard and sink every dollar you own into the market. Whether the bulls are running wild or the bears are growling, be more like an elephant: Remember the past.
With our assistance, you can chart a sensible path for the future.
This article was written by a professional financial journalist for McCarthy Asset Management, Inc and is not intended as legal or investment advice.