HomeFinance NewsFinanceDon't Panic! Stock Market Volatility: A Loser's Playbook

Don’t Panic! Stock Market Volatility: A Loser’s Playbook


Bailing on the stock market during volatility is a ‘loser’s game,’ financial advisor says. Here’s why


Investors who try to avoid market volatility by selling their stocks during downturns typically lose out on significant returns.

This is because the stock market’s biggest returns tend to be concentrated in a few trading days over the long term.

Data shows that investors who missed the best 10, 30, 40, and 50 trading days over the past 30 years would have earned significantly lower returns.

Even worse, many of these best trading days occurred during recessions when the market was at its most volatile.

Staying invested during these volatile times is crucial because it’s nearly impossible to predict when the market will turn.

Even experienced investors often make the wrong guesses, resulting in lower profits.

Experts recommend making a long-term investment plan and staying the course, rather than trying to time the market.

This approach has been proven to lead to better returns over the long term.

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    “However, the math suggests — quite convincingly — that this is usually the wrong strategy.”

    “Markets can react unpredictably — and speedily — to unknowable factors like the strength or weakness of a monthly jobs report or inflation reading, or the breakout of a geopolitical conflict or war.”


    “Skittish investors may feel it’s better to bail on the stock market than stay invested during volatile periods.”

    “Over the past 30 years, the S&P 500 stock index had an 8% average annual return, according to a recent Wells Fargo Investment Institute analysis. Investors who missed the market’s 10 best days over that period would have earned 5.26%, a much lower return, it found.”

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