Bulls, Bears and Ballots
During a presidential election year, investors tend to seek a connection between who wins the White House and which way stocks will go.
Sudden market downturns can be unsettling. But historically, US equity returns following sharp downturns have, on average, been positive.
Sticking with your plan helps put you in the best position to capture the recovery.
(1) The average annualized returns for the five-year period after 10% declines were 9.33%; after 20% declines, 9.66%; and after 30% declines, 7.18%.
This post was prepared and first distributed by Dimensional Fund Advisors.
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During a presidential election year, investors tend to seek a connection between who wins the White House and which way stocks will go.
What do you do if you receive a big bonus at work, inherited some money or enjoyed a recent windfall you would like to invest?
Unfortunately, as human beings, we are prone to behavioral tendencies and mental shortcuts that do not always work in our favor.
The trade-off between risk and reward is a key part of any investment strategy. But risk means different things to different people.