Should I Sell After the Market Drops?

Remember when the market tanked from September 17 to December 17?

It dropped 18% in 3 months. Eeek! Over the last 6 weeks, it's bounced back 9%.

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And that's why we never, ever, ever sell. Because after big drops, come big gains. 

 (Pro tip:  you'll only get the big gains if you're still invested.) 

 Let's look at a few recent ones.

 1/26/2018 - market dropped 10% in 3 weeks.   Bounced back 6% over the next two weeks. 

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6/8/2016 - market dropped 6% in 3 weeks.   Bounced back 9% over the next 3 weeks.

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9/17/14 - market dropped 7% in 4 weeks.  Bounced back 11% over the next 5 weeks

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And the granddaddy of them all….

 3/9/2009 - market dropped 57% in 5 months.   Bounced back 82% over the next 12 months.

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If you're silly enough to sell, then you'll most likely sell in a moment of extreme, irrational and emotional stress….like at the bottom.  

 And if you sell at the bottom, you will miss the sharp (and unpredictable) reversal back up.

 Ride it to the bottom.  Sell.  Lock in  your losses.  And then sit on the sidelines while the market returns. 

Better to not predict the future and stay invested through it all.

DISCLAIMER:  This publication is for educational purposes only and should not be considered financial, tax or legal advice.  These statements have been simplified for illustration purposes.  Consult your financial planner or tax advisor for help with your specific situation.