Big stock market losses are nobody’s idea of fun. But they have been happening this year with dismaying regularity.
It’s not just a bad day or a bad week. The S&P 500 has fallen seven weeks in a row and on Friday briefly entered bear market territory, Wall Street jargon for a decline of at least 20 percent. If you are a long-term investor, you may not want to look at your portfolio right now. The numbers may be unnerving.
But I have no choice. I look closely at this data all the time as part of my job, not just at the overall markets but at my own returns from a portfolio made up overwhelmingly of low-cost, diversified index funds that track the total stock and bond markets. What I’m seeing is ugly.
What am I doing about it? Buying more stocks and bonds through index funds.
This isn’t an attempt to make a smart bet that the stock market has already bottomed and is about to start a powerful rally. I have no idea if any of that is true. I’m just continuing with investments I’ve been making for decades, despite the market’s often obnoxious behavior. My long-term investment numbers are pretty good, even though the short-term results are painful.