Why We Shouldn't Live in Fear of a Market Downturn


With the US Stock market finishing the decade in such strong fashion, you don't have to look far to hear someone talking about the fear of the next recession. David Booth, founder of Dimensional Funds, was recently featured in Worth Magazine teaching how investors can have a rewarding experience by changing the way they think about investing. An excerpt below and the full article in the link provided.

"Maybe we will have a recession, maybe we won’t—but be wary of predictions on how markets will behave. It’s a losing game. The results of those who try to time markets or pick winners have been studied extensively, and there is no compelling evidence they do better than you would expect by chance...Over the long haul, markets have behaved the way we hoped they would. In the nearly 100 years of data we have, for example, the U.S. stock market has returned 10 percent per year on average, though it has rarely returned that in any individual year. Think of the markets’ force as a raging river. Any experienced rafting guide will tell you not to fight the rapids. You’re better off charting your course, adapting incrementally and not over steering."

To read the entire article, click here.