Having Patience Through a Downturn
Patience is a virtue.
I have never liked that saying. I find it is often said to someone who is in the midst of struggle and worry. It is like telling someone in a frantic emotional state to “calm down” or “chill out.” That always goes well. Try those phrases on your spouse sometime; see how it works out.
Financial advisors also emphasize patience in the middle of a market downturn. You may have seen your accounts decrease in value, you see the negative headlines, and you make the call to your advisor. What is the response?
“This is temporary. The market will recover. You just need to be patient.”
Technically, that statement may be correct. But we, as advisors, need to do a better job of giving you evidence to support that claim. Here are some data points you can remember when the market is down. Check out this article at Capital Group.
- Bear markets (when stock prices fall 20% or more from recent highs) have occurred on average about once every six years. They last on average 370 days.
- Market corrections (stock price decrease of 10% or more) have occurred on average once every 30 months and last on average 234 days.
- Market downturns (stock price decrease of 5% or more) have occurred on average about once a year and last on average 101 days.
Market declines are a normal part of the investor experience. That does not mean they are not uncomfortable. We are here to show you how you can be okay and how your goals can be accomplished even when the market is down. If you need to be relieved of worry, give us a call.