With the U.S. markets falling on Friday, you may be tempted to take some money off the table.
The index is down 2.5%. The S&P 500 has fallen.
It is likely that selling today will cost you in the long run.
Allan Roth, founder of financial advisory firm Wealth Logic in Colorado Springs, Colorado, said that pain is a sign that you are investing well.
He said that you will lose out on the good days if you can't survive the bad days.
The S&P 500 has produced an average annual return over the last 20 years.
If you missed the best 20 days in the market because you became convinced you should sell and reinvested later, your return would be less than 1%.
Rob Williams, vice president of financial planning at Charles Schwab, said that longer-term investors should stay the course.
The market gives more than it takes.
Steve Hanke, a professor of applied economics at the University of Baltimore, calculated the average annual return on stocks between 1900 and 2017.
After adjusting for inflation, the average annual return was still 8%. The S&P 500 had at least 16 bear markets. A bear market is defined as a decline of 20% or more.
Financial advisors don't want to make big changes to your investment strategy based on one period of decline.
We don't know what the new coronaviruses variant will mean. The S&P 500 index was up over 25% at the start of the month, despite all the Covid headlines.
