Why You Shouldn’t Sell During A Stock Market Panic (and what you should do instead)

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The new year started off scary for many investors. With the Dow Jones Industrial Index recording the worst start to a year in history, you might be contemplating joining other investors in the mad dash for the exits.

But history has shown us that this would be a big mistake.

Why?

As ugly as a pullback can be, here’s some data to put it all into perspective:

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</p> <p><strong>Please include attribution to InvestmentZen with this graphic.</strong></p> <p><a href='http://staging.investmentzen.com/blog/why-you-shouldnt-sell-during-a-stock-market-panic/'><img src='http://staging.investmentzen.com/blog/wp-content/uploads/2016/01/why-you-shouldnt-sell-during-a-market-correction.jpg' alt='Why you shouldn't sell during a stock market correction' width='718px' border='0' /></a></p> <p>Via: <a href="http://staging.investmentzen.com/blog/why-you-shouldnt-sell-during-a-stock-market-panic/">InvestmentZen.com</a></p> <p>

References

• http://money.cnn.com/2015/08/24/investing/stocks-market-crash-by-the-numbers/
• http://useconomy.about.com/od/glossary/g/Market_Correcti.htm
• http://jlcollinsnh.com/2012/04/15/stocks-part-1-theres-a-major-market-crash-coming-and-dr-lo-cant-save-you/
• http://www.businessinsider.com/chart-10-stock-market-corrections-2014-2
• http://www.fool.com/how-to-invest/personal-finance/2015/08/28/5-figures-that-put-the-stock-market-correction-in.aspx
• http://phillipsandco.com/files/3214/3318/4864/sp_500_Worst_Drawdowns.png
• https://en.wikipedia.org/wiki/Financial_crisis_of_2007%E2%80%9308
• http://dqydj.net/sp-500-return-calculator/
• http://money.cnn.com/2015/03/09/investing/president-obama-stocks-market-march/
• http://www.bloombergview.com/articles/2016-01-07/be-smart-don-t-try-to-time-this-stock-market
• http://www.thesimpledollar.com/why-you-cant-time-the-market-thoughts-on-investing-in-stocks/
• http://www.investopedia.com/articles/financial-theory/09/uncorrelated-assets-diversification.asp
• http://www.mrmoneymustache.com/2011/05/18/how-to-make-money-in-the-stock-market/
• http://jlcollinsnh.com/2012/04/25/stocks-part-iii-most-people-lose-money-in-the-market/
• http://thecollegeinvestor.com/11005/preparing-for-a-stock-market-correction/
• http://www.etf.com/sections/index-investor-corner/ferri-wisdom-6040-portfolios-timeless?nopaging=1
• http://www.mrmoneymustache.com/2014/08/20/how-to-invest-in-overvalued-market/