What Feels Best in a Bear Market Could Be the Worst Decision for Your Financial Health
The worse-than-expected May inflation reading was a tipping point for investors hoping inflation would reverse its trend and begin ticking down. The rude awakening came as the Consumer Price Index increased by 8.6% for the 12 months ending May 31, which the U.S. Bureau of Labor Statistics quoted as the largest 12-month increase in over 40 years.
Between June 6 and June 16, broader indices suffered the worst 10-day drop since spring 2020 as the Nasdaq Composite fell 11.7%, the S&P 500 fell 11%, and the Dow Jones Industrial Average fell 9.1%. Many stocks set fresh 52-week lows on June 16.
It can be hard to think long term when stocks continue to find lower lows. "I should have sold a month ago" is what folks will say when markets take a turn for the worse. There's no doubt that selling and walking away to stop the bleeding can be an emotional release. But it's usually a terrible decision for your financial health. Here's why holding through periods of volatility -- despite the pain -- is the best course of action during a bear market.
Source Fool.com
