Why investors should stay the course during turbulent market times

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SALT LAKE CITY – After seven straight weeks of losses for the S&P 500 and the Nasdaq, and eight for the Dow Jones Industrial Average, all three rallied last week. Now they slip again.

This Wall Street roller coaster has scared a lot of people about their investments and retirement.

News headlines are also tough on investors. Between falling markets, rising inflation, war in Eastern Europe and the resurgence of COVID-19, again many people pulled out of the markets.

In turbulent times, the stock market is like the Cannibal at Lagoon ride. There are drops. We’re talking about memorable, stomach-turning fat drops. But if you look at the data, turbulent times, like right now, also produce some of the biggest upsides.

In fact, there’s an old trope in the investing world that goes, “If an investor missed the ten best days of the decade, they would cut their income to next to nothing.

While that rings true, the flip side can certainly be appealing. Imagine if you somehow managed to time the market and miss the ten worst days. You would probably be rich!

Don’t be tempted, warned LendingTree’s Matt Schulz.

“It almost never works,” he said.

Schulz, and most investment advisors, say that trying to time your investment with the ups and downs of the stock market is a “fool’s game.”

And according to data compiled by Lending Tree and shared with KSL investigators, many investors agree. Some 38% of investors told Magnify Money/Lending Tree that they sold stocks in the past year due to a current event. 40% of them regretted it.

Schulz, who studies market trends, said the panic selling was understandable.

“It may make sense in your head to say, ‘Okay, I’ll cut my losses,'” he said.

But savvy investors don’t try to sell before a drop. And even better, they try to buy after a drop. And then let it come back up as long as possible.

“You can go in and buy more thinking it will end up being more valuable in the future,” Schulz explained.

Young investors have more time to ride out market meltdowns, so Schulz said they should stay invested. For those nearing retirement, now is usually the time to invest more in lower-risk, more stable securities like bonds. But that doesn’t always apply in every situation, which is why Schulz advises seeking professional financial advice.