Maintaining Perspective During Market Downturns

The impact of COVID-19 has hit us everywhere, from our homes and workplaces, to our 401(k) plans. At a time when loss is all around us – loss of savings, loss of jobs and loss of lives – it’s only natural to feel the panic creep in.

When it comes to worrying about volatility on Wall Street, it’s crucial to not let your emotions drive your investment decisions. Resist the urge to act out of panic. And instead, focus on your long-term goals.

During moments of stock market doom and gloom, you may feel tempted to withdraw from your investments. But the markets sometimes rebound much faster than you expect. You could shortchange your financial future by pulling out of the market too soon.

Stay invested

Double-digit, mid-year declines in the market can rattle investors’ nerves. But it’s important to remember that years with large dips can sometimes end with even larger gains. In 1998, for example, there was a mid-year dip of -19% in the S&P 500 Index, but the year ended with a 29% gain.*

From January 1, 1988, to December 31, 2018, the S&P 500 Index had positive year-end total returns in 25 out of 31 years, despite mid-year dips.*


Stay the course

While market volatility can be nerve-racking, reacting emotionally and changing long-term investment strategies in response to short-term declines could prove more harmful than helpful. Adhering to a well-thought-out investment plan can help you remain calm during periods of short-term uncertainty.

We’re here for you

It’s much easier to feel calm and confident during times of uncertainty if you have a financial plan and understand how it’s going to help you reach your goals. Contact us here to reach out to a Bankers Life investment professional to review your portfolio today.


* Source: © 2020 Morningstar. Stocks are represented by the S&P 500 Index, a market capitalization-weighted index of 500 stocks designed to measure total US equity market performance. International stocks are represented by the MSCI EAFE Index, a free float-adjusted, market capitalization-weighted index that is designed to measure the equity market performance of global developed markets, excluding the United States and Canada. Indexes are unmanaged and one cannot invest directly in an index. Index returns do not reflect any fees, expenses or sales charges.

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