In one day on 9/20/21, the market ended down about 1.7%. “Dow, S&P 500 see worst day in months” is an actual CNBC headline.
But guess what. Who cares. Volatility is an expected part of investing. What the market does on any given day, month, or even year should be irrelevant to you. Investing is all about building wealth over long periods of time. Market volatility, corrections, and crashes WILL happen along the way. We don’t know when they’ll start, we don’t know when they’ll end. The wise investor understands this and rides them out. Any reaction to the market is much more likely to hurt you than help you.
Over time the market always goes up. It’s four step forwards, one step back. But the steps forward don’t make news. They’re always happening and they’re not scary. The one step back does make headline news. But they’re expected and should be ignored.
The drop in the market over the last few days? It left the S&P 500 at a share price of 4,357. That’s the same price the market was at on July 21st. That’s a blink of an eye in terms of investing.
Will the market rebound tomorrow or continue to go down? I have no idea. If I knew those things I could trade on that information and become richer than Jeff Bezos before the milk in my fridge goes bad. Be suspicious of anyone who claims to prognosticate short term predictions in the market.
But long term we all know what is going to happen. Companies are going to continue to sell, grow, and profit. Those growth and profits will be funneled back to the owners who stay the course. That owner should be you! (The easiest way, of course, is by buying and holding index funds).
As always, reminding you to build wealth by following the two PFC rules: 1.) Live below your means and 2.) Invest early and often.