To most investors, the central message—implied, but not written—of news stories about dramatic stock-market dives is “GET OUT WHILE YOU STILL CAN.” If things are going downhill so quickly, shouldn’t everyone bail?
Well, no. While stock prices may jump around frantically over the course of days or even years, markets have a nice habit of moving steadily upward in the long term. No individual investor (except perhaps one in or very close to retirement—and by then it’s probably better to be more balanced toward bonds rather than stocks anyway) should feel compelled to follow daily happenings of the stock market, no matter how bleak they may seem.
This calming message may not be legible in front-page stories with words like “turmoil” and “aftershocks,” but thankfully it is still repeated regularly elsewhere. Herewith, for consultation this week as well as during any future panics, the soothing words of financial-media headline writers:
Don’t panic. Really, don’t.
Really, truly, don’t panic.