If you were awake at all this week, you caught glimpses of the stock market drama. Maybe you tuned it out? Here’s a quick recap:
Monday. Huge sell-off, the worst one-day decline since October 2020.
Tuesday: Big rebound recaptured 80% of Monday’s losses.
Wednesday: Rally continues, Monday’s losses fully recouped.
Thursday: Stocks rise a bit, ended the day up.
Friday: All major indices up, near their record highs.
And that’s just the numbers… Financial media headlines were absolutely schizophrenic. We saw everything from “Dow Plunges on Covid Resurgence” and “Speculators Flee Suddenly Volatile Market” to “Wall Street Ends Higher, Powered by Strong Earnings, Economic Cheer.”
Economic cheer? Let’s take a closer look at that last article…
It starts with the typical bullish post hoc rationalization for the market’s response: “robust corporate earnings and renewed optimism about the U.S. economic recovery fueled investor risk appetite.”
Yay Wall Street! Stocks tried to go down and failed, everything’s all better. Move along, nothing to see here…
Amid all the hysteria, there were a few interesting tidbits: this CNBC article and another published on Monday both emphasized market volatility. Both titles read like a PR firm’s damage control efforts: “Don’t make this mistake,” and “volatility can be a good thing.”
Don’t be afraid of volatility! It’s a good thing!
While volatility can be troubling for investors, experts caution against any hasty selling when markets fall. In addition, slumping stock prices can be a prime buying opportunity that investors should take advantage of.
Volatility is a “normal part of the process of investing.” And if your stocks go down, well, buy more of them!
…click on the above link to read the rest of the article…
