Financial markets are unpredictable and sudden shocks can cause investors to overreact and abandon their long-term investment strategy. It’s relatively common for financial markets to experience declines. For example, over the past twenty years, the S&P 500 Index has experienced eight corrections with declines of at least 5%. Historically speaking, these market declines have been relatively short-lived and have been followed by periods of strong market performance. Investors who remained focused on their long-term investment objectives outperformed those who exited their positions.
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