After a period of relative calm in the markets, in recent days the increase in volatility in the stock market has resulted in renewed anxiety for many investors. From February 1–5, the US market (as measured by the Russell 3000 Index) fell almost 6%, resulting in many investors wondering what the future holds and if they should make changes to their portfolios.[1] While it may be difficult to remain calm during a substantial market decline, it is important to remember that volatility is a normal part of investing. Additionally, for long-term investors, reacting emotionally to volatile markets may be more detrimental to portfolio performance than the drawdown itself. INTRA-YEAR DECLINES Exhi
Yesterday's stock market selloff is getting everyone's attention. The market, as measured by the Dow Jones Industrial Average, plunged 1,175 points. While it was the largest single day point drop ever, the loss as a percentage of 4.6% doesn't even crack the top 10. By comparison, we've experienced much larger declines in the market: 1987-10-19 −22.61% 2008-10-15 −7.87% 2008-12-01 −7.70% 2008-10-09 −7.33% 1997-10-27 −7.18% 2001-09-17 −7.13% 2008-09-29 −6.98% 1998-08-31 −6.37% 2008-10-22 −5.69% 2000-04-14 −5.66% ----------------------------------- 14. 2018-02-05 −4.60% In any event, we know that the recent days in the markets are uncomforta
