Many investors feel that the real secret to investing is to know in advance when the stock market will decline. If only you could get out in advance, you could really make the big bucks. And now I am going to share with you the secret of the ages. When will the stock market experience a 10% decline? The answer is all the time.
In 15 out of the last 20 years, the stock market has gone down at some point during the year by at least 10%. It happened in 2015, 2016 and in every year between 2009 and 2012. So if you go by that, you would never invest in stocks. However, on the whole, stocks were up 5 out of those 6 years (the down year stocks were down 1%), with a total gain of a 45%.
Corrections are a normal part of the investing cycle. It’s never any fun. But the truth is it happens all the time. Just know that when it happens, stocks will recover, as they always do. Just don’t overpay for the stocks you own, and over time you’ll be fine, however un-fun those 10% declines are.