Lessons We Can Learn From The Stock Market Crash and Recovery
The Dow Jones Industrial Average closed at 14,700.80 today which is just off its all-time high. It has surpassed where it was before the 2007 financial crisis. It took about 6 years for the market to get back to even and the lesson here is that investors who are in it for the long term (10 years or more) usually do okay. When the market started crashing in late 2007 all the way through 2009, a lot of investors left the equities market and went into bonds or GICs. While it is prudent to protect your capital, the problem is, these same investors were slow to get back to the market. At its peak in 2007, the Dow Jones was at 14,093.08 and went down as low as 6626.94. It’s impossible to time the market and nobody knew 6547.05 would be the bottom of the market. But as the market started coming back from the low, investors were still sitting in bonds and GICs. When the Dow Jones hit 8,000, people were still in the sidelines waiting and being cautious. At 10,000, people start...