Burton Malkiel had a great article in today’s WSJ. Malkiel is a highly regarded professor from Princeton and the author of the investing bible, A Random Walk Down Wall Street. Here’s a link to the article:
http://online.wsj.com/article/SB10001424053111903366504576492512709525754.html
The title really says it all….Don’t Panic About the Stock Market, Investors who resist the urge to get out during rough times like this will be glad they did.
Here are some key points that Malkiel makes in the article:
“This is not the market meltdown of 2008.”
“Investors who have sold out their stocks at times when there have been very large declines in the market have invariably been wrong.”
“My advice for investors is to stay the course.”
“No one has ever become rich by being a long-term bear on the fortunes of the U.S. and I doubt anyone will do so in the future.”
“In times like this investors should rebalance their portfolios….years from now you will be glad you did.”
I believe Malkiel is somebody worth listening to. He has devoted his whole life to studying the financial markets and how they work. He has no ax to grind. His only goal is to find the truth about investing.
What’s going on now doesn’t matter to the long term viability of your portfolios.