In 2011, the market returned all of 1%, dividends reinvested, or -1% with no dividends.
No big deal, right? I mean, 1% on either side, that’s NOTHING!
Yet, if you dive deep into the intra-year movement of the market you’ll see a VERY different story. You’ll see that the market was up around 7.50% to start the year.
Then abruptly fell nearly 20% through October.
You think people werent’ worried then? After all, it was just 2 short years ago, we bottomed out in March 2009. Were we going back to doomsday???
Were the naysayers right after all? The Government had taken on too much debt? Obamacare was going to bankrupt us all? A government shutdown? P/E ratios were astronomically high???
Yet, from October to the end of the year the market gained 14% and hasn’t looked back since, until RIGHT NOW.
So, are you now panicked? DId you panic then? What will 2018 end up as? A 3% loss or a 3% gain? In a few years will you look back at 2018 as a rather ‘boring’ year, like most are doing for 2011?
I bet you will.
So, with that said, why do anything? The damage has already been done.
Could more damage happen? Of course and that’s the issue you need to come to terms with. Is it worth it, this roller coaster, year after year?
If not, just don’t ride. Why bother? If you can hang in there, you SHOULD be rewarded. But as always, only time will tell.