Think about this quote: If you want to control someone, all you have to do is to make them feel afraid.
The financial media wants you to fear market volatility. It hopes it will spur you to “take action” and buy or sell securities and mutual funds.
More trades means more revenues for the securities industry.
And lower returns for you.
For the period from 1979-2017, the US stock market had an average intra-year decline of 14%.
In 33 out of 39 years examined, calendar year returns were positive.
Investors who ignored market volatility and did nothing were rewarded.
If there was no volatility, there would be no risk in holding stocks.
The expected returns of stocks would be equivalent to “risk free” investments, like bonds guaranteed by the full faith and credit of the US government.
Don’t be frightened by market volatility.
Instead, fear those who are trying to scare you.