If the Stock Market Drops 20%, History Says This Is What Could Happen Next
Bear markets provide excellent buying opportunities if you stay the course.
Overview
A 20% stock market decline can easily feel like the point where it's time to head for the exits.
After all, a drop of that magnitude, which meets the technical definition of a bear market, can be psychologically damaging. The headlines usually get worse, investor confidence drops, and there's no guarantee that a 20% loss won't eventually become a 30% or 40% loss.
Details
But here's the part that most investors miss. Historically, some of the market's strongest returns have occurred during recessions and bear markets. Sentiment often turns quickly once optimism returns, leading to big rallies at unexpected times.
Source
Originally published at www.fool.com.
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Disclaimer: This article is for informational purposes only and does not constitute investment advice. Data may be delayed up to 15 minutes. Past performance is not indicative of future results. Consult a licensed financial advisor before making investment decisions.