During the latter part of 2017 stock markets declined quite rapidly for
the first time in a while. Potentially overvalued tech stocks, US interest rates rising faster than expected and the US / China trade war all played a part in spooking the markets. Falls like this can be scary and the media sensationalizes things.
Here are a few insights:
• The stock market declines on average about 14% each year – from the highest point to the lowest point in the year but it’s not a straight 14% decline in one go. Markets end up rising nearly 3 out of every 4 years.
• The stock market declines by 2% or more in a day, about 5 times every year.
• Over long periods, returns from the stock market significantly beat inflation.
• Trying to time the market is impossible.
Now, admittedly this data relates to the US stock market, but the trends are very similar elsewhere. Stock market declines are perfectly normal and temporary, the advance is permanent.
For your own personal Financial Director to run your family finances call:
Carl Roberts FPFS, Chartered Financial Planner – firstname.lastname@example.org – rtsfinancialplanning.co.uk –
01908 592544 – 07702 965275
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