We are having one of those days when if it can sell off it will sell off.
US oil prices are headed for their ninth consecutive week of falls, the longest losing streak since 1986. (Bloomberg)
Let’s put this in perspective. Markets on average have one 10% decline each year. The last time we saw a run of the mill correction was four years ago in 2011. So we were due. Corrections like this should be expected, anticipated and welcomed as a normal part of the business cycle. Corrections and there short-term volatility are the price we pay as investors to get returns that beat inflation.
So what to do? If you are a long-term investor with a well-diversified portfolio all you can do is sit tight. This too shall pass. Selling now is just locking in loses and doing the wrong thing.
Don’t act on your emotions. It is normal to be concerned, this correction has been abrupt, but kicking in the flight response in our primitive brain is not appropriate.