Opportunities are still out there for investors

Article Excerpt

Corrections have been a routine occurrence throughout stock market history. These periods of volatility and economic uncertainty are challenging for investors to navigate but frequently offer excellent investment opportunities for long-term gains. However, the market disruption that started in mid-February has been an extraordinary event, both in terms of the speed and magnitude of the market downturn as well as its volatility. Looking at past trends—which isn’t always an indication of the future—stock markets have probably seen the bulk of their initial adjustment. That’s in line with the average of the 10 significant bear markets since 1957. Further declines, comparable to the 1974, 2002 or 2008 bear markets, will depend on how quickly the economic impact of COVID-19 can be contained. Stock markets rise over time The natural tendency for stocks is to rise over time. Average annual growth for U.S. stocks over the past 92 years has been 9.8%. That’s significantly higher than the average rate of inflation and the return on cash. However,…