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If Down-Markets are Normal, Why Should I Invest?



Indexopedia Research Team
By Indexopedia Research Team | January 8, 2025 | In

Investing in the stock market is a journey with peaks and valleys. Every investor, regardless of experience, faces the reality that markets will go down at times. So, a natural question arises: if down markets are a normal part of investing, why would anyone choose to put their money at risk? While market declines can be unsettling, understanding the full picture reveals compelling reasons to stay invested through both the highs and the lows. Down Markets Are Temporary, Growth Is Long-Term Historically, markets tend to recover from downturns and go on to achieve new highs. Corrections, bear markets, and recessions are part of the natural economic cycle. No one should ever invest thinking it is an easy walk down-hill. While markets may experience periods of decline, long-term trends show that growth has been the prevailing pattern. For example, the S&P 500 has returned an average annualized return of around 10% over the last century, despite several significant drops. If you zoom out from the day-to-day noise, the stock market has generally rewarded long-term investors who stay the course. The Power of Compounding Even if markets

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