Markets Are Tumbling - What To Do?

Yahoo!Finance - 40 year S&P 500 Chart

Are you worried about the declines in the stock market?

Do you need the money invested in the markets now?

If you don't need the money invested in the stock market within the next few years, then there is nothing you need to do right now.

It's normal for stock market prices to go up and down. Most years, stock market returns are positive, but on occasion they decline. So, far this year, as of March 14, 2025, the S&P 500 declined -4.35%. That means that if your S&P 500 ETF was worth $1,000 on December 31, 2024, it's worth $43.50 dollars less, or roughly $956.50.

Today, the S&P 500 is valued at $5,638. That is still above the 52-week low of $4,953.56.

Because stock market prices are volatile, you shouldn't invest money you'll need within the next three to five years in the financial markets. That's because, stock prices might decline and take a little while to rebound.

That said, if you need some of the money that's currently invested in the markets, obviously, you'll need to liquidate some of your investments.

But, if you don't need your investment dollars within the next few years, it's typically a good practice to leave the money invested.

Although there are no guarantees in investing - or life - history has shown that in most cases, the stock market has rebounded within a few years.

If you sell now, after a drop in prices, you might be sacrificing future returns.

You have to be right twice; first, when to sell and second, when to get back into the market. Market timers usually have lower long term investment returns than those who stay the course and avoid frequent buying and selling.

If you expect U.S. and global companies to grow and prosper in the future. Then investing in the stock market is a way to benefit from that growth.

More times than not, the S&P 500 rises. But, it's been a bumpy ride, with many ups and downs in prices during shorter periods.Market
 

When investing:

• Be patient.
• Invest only money that you don't need within the next 5+ years in the financial markets.
• Diversify across the US and Internationally.
• Add in some cash or fixed holdings if you're older and/or want to reduce the volatility of your investment portfolio.

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