Economy and that scary "R" word

[Schneed10]

Originally Posted by mheisig

Kevin Hassett of the American Enterprise Institute had an interesting checklist of sorts in the Washington Post, well worth a read:



If you're worried about the market, keep in mind that prices will almost certainly be higher five years from now. If you look at your "stock money" as "five year money," 95% of the time, stocks' five year average annual returns fall between -0.8% and 26.0%.

I agree with this.

Trying to figure out when it's wise to dump stocks and run to bonds or gold or cash, it's fruitless. Most of the time, you'll jump out of stocks AFTER the lion's share of the drop is done. And most of the time, you'll get back into stocks AFTER they've bounced back quite a bit.

You don't want to get out of stocks now, because you never know when they're going to bounce back up. You could miss out on that bounce.

Assuming you don't need the money for a number of years, just ride it out. It pays off in the end.