Essentially locking in their losses. Many of those people and many others who were not in the markets stayed out of the equity markets. As a result, they did not participate in the huge run-up that has taken place over the past years. In fact, if you stayed in the market and did not sell your investments they have recovered. In many cases, they have also doubled from the original investment levels. Consumers and investors meed to manage investment volatility from the perspective of knowing when to hold onto them and when not to.
It can be pretty scary for many people watching your investments swing, particularly if they are large swings. However, if you are well invested in blue-chip stocks, diversified, and earning decent dividends, there is less likelihood that you would be hurt over the long term with investment volatility. In addition, we suggest that you talk to several investment advisers, assess the markets, assess the long term impacts on companies, etc to make your own decisions. Above all avoid making emotional decisions and decisions which will simply line the pockets of your investment advisers.
In other words, get involved, and do the work needed to manage investment volatility impacts on your own investments so that you can make intelligent decisions. If there is one thing we have learned, no one and that includes the investment advisers has a crystal ball that accurately tells us where the markets will go. The advisers make their money selling and trading stocks, so before you take their advice, check it out yourself.
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