How to handle volatility as a long-term investor

August is typically the hottest month of the year. For stocks, August has brought both extreme heat and extreme cold… August is typically the hottest month of the year. For stocks, August has brought both extreme heat and extreme cold…                                                                                                      [Header]( How to Handle Volatility as a Long-Term Investor Dear reader, August is typically the hottest month of the year. For stocks, August has brought both extreme heat and extreme cold… The S&P 500 suffered its worst one-day decline since September 2022 on Monday. A few days later, the index gained 2.3% – marking its best daily percentage gain since November 2022. The biggest lesson we can take from this volatility is that trying to time the market is extremely difficult. Long-term investors are better off holding through volatile times rather than attempting to buy and sell on every swing. Now, by no means am I saying that swing-trading strategies don’t work. However, a successful system requires a strategy that eliminates human emotion. Between 1994 and 2023, if you were out of the market during the S&P 500’s 10 best days, your return would have been 54% below that of a simple buy-and-hold strategy. If you missed the 30 best days over that 20-year period, your return would have been 83% below that of investors who held through the volatility! [Best Days] Now, you may be thinking that you could just sell your stocks and sit in cash during bear markets – think again. The S&P 500’s 10 best days between 2003 and 2022 were centered around the 2008-2009 Great Financial Crisis and 2020 COVID-19 Panic. [10 Best Days] If you sat in cash during bear markets, you would have missed all 10 of those days. So as hard as it is to hold through volatility and pullbacks, the numbers prove that it’s the best strategy for long-term investing. With that, let’s recap everything we talked about in Market Insights this week. Given the recent market conditions, a lot of our focus was on volatility and broad market corrections… Monday: Big down days always make it feel like the world is ending on Wall Street. But in reality, the world will only end once… and today isn’t that day. [Click here to read Are We Experiencing a Market Correction?]( Tuesday: It’s a near certainty that the Federal Reserve is about to come in strong and start slashing rates at its next meeting in September. That makes now the time to start evaluating your portfolio. [Click here to read It’s Time to Prepare for Massive Interest Rate Cuts.]( Wednesday: The last week has been a rollercoaster of sorts – for everything from stocks and bonds to cryptos and even the global geopolitical environment. All are likely impacting your investments, so on the latest episode of the SteadyTrade Podcast, Time Bohen and I broke down exactly how the headlines have been moving the markets. [Click here to read Breaking Down a Wild Week on Wall Street.]( [STEP 11]( Thursday: It’s time to leave the classroom behind and head into the real word. As part of his weekly feature, Imre Gams hit the price and charts and applied his top-down method of analysis to what has been going on in the stock market. [Click here to read See the Market Through Imre Gams’ Investing Lens.]( Friday: Mixing politics with the stock market can sometimes result in irritated readers. But with the presidential election less than 100 days away, we can’t afford to ignore its impact. [Click here to read Is Trump Good for the Stock Market?]( Here’s to the future, [Matt McCall signature] Matt McCall Editor, Market Insights [Centurion Logo] © Centurion Publishing 13809 Research Blvd, Suite 500, Austin, TX 78750 *Results are not typical. Past performance does not indicate future results. All investing carries risk. Our Privacy Policy, along with our Term & Conditions, governs your use of this site. By using our site, or by accepting the Terms of Use (via opt-in, checkbox, pop-up, or clicking an email link confirming the same), you agree to be bound by our Terms & Conditions and our Privacy Policy. If you have provided personal, billing, or other voluntarily provided information, you may access, review, and make changes to it via instructions found on the Website or by replying to this email. To manage your receipt of marketing and non-transactional communications, you may unsubscribe by clicking the “unsubscribe” link located on the bottom of any marketing email. 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