Resisting the sell button
“These are the times that try long-term investors’ souls,” says Money Magazine’s Stephen Gandel in CNNMoney.com. Equities are down about 20 percent from their recent highs, after the “worst month for stocks since the Great Depression.” And your gut is probably telling you to cut your losses and sell. That reaction would be “the exact wrong one.” First, markets recover quickly, and it’s notoriously tough to buy back in at the right time. “Second, stocks are actually a better deal—maybe even ‘safer’—than they were a year ago.” To “keep you finger off the sell button,” remember: you’re investing for the long haul, things are comparatively not that bad, and this drop won’t actually hurt much in the long run.
Requieum for a boom
The Dow is down 19.9 percent from its October high, says Roger Cohen in The New York Times, but it’s worth noting that since 1960, the average bear market has knocked stocks down 31 percent. Still, “we had good times, didn’t we?” And not everyone is suffering. “China, India, and Russia joined global markets,” and many of their workers are now eating two meals a day now instead of one, and trading their bikes and scooters for cars. Compare that to “debt-ridden America’s economic vulnerability,” and it becomes clear that out military dominance “is no longer matched by economic dominance.” For the West, “rough days lie ahead,” but maybe we’ll find “some more reasonable balance.”
THE WEEK'S AUDIOPHILE PODCASTS: LISTEN SMARTER
- Germany has a serious wolf problem
- 6 things the happiest families all have in common
- 10 things you need to know today: December 29, 2014
- How Sonia Sotomayor became the Supreme Court's preeminent defender of civil liberties
- There's a raging Islamic insurgency in Thailand's strangest party town
- Enjoying your cheap gas? Thank fracking — and the beauty of free markets!
- 43 TV shows to watch in 2014
- 7 things that will make you healthier and help you live longer, according to science
- Why we can't educate racism away
- How to be the most productive person in your office — and still get home by 5:30 p.m.
Subscribe to the Week